Note: This article was provided courtesy of Iris.xyz.
By Julia Johnson-Ketterer
The topic of robo-advisors has been part of many of our conversations with subscribers and it has dominated the financial press. Our research has shown that a sizable portion of affluent investors—those with at least $100,000 in investable assets—has readily adopted these services, allocating more than $20 billion of assets to robo-advisors. All told, we can say confidently that robo-advisors are no longer new or emerging—they have arrived.
Robo-advisor technology has existed for years and has been leveraged by emerging brands such as Betterment and Wealthfront, which accelerated the growth of the robo-advisor market, as well as legacy brands such as Charles Schwab’s quick jump in branding its offering as Intelligent Portfolios.
But despite the adoption of these offerings, the industry talk and press, when we began our research we soon understood that there are many definitions of a “robo-advisor” in the marketplace and that investors may not be familiar with the term. To help facilitate our research process and better understand the term, Cogent provided our survey respondents with this definition:
“Some financial services firms offer a service that provides investment advice based upon sophisticated computerized models, as opposed to either relying on a financial advisor or managing your assets on your own. This type of service is sometimes called a “robo-advisor.”