Uptake of robo advisers among the UK’s mass affluent individuals is on the rise. This is clearly a result of players in this space continually expanding their propositions to meet more consumer needs. Traditional players need to take notice to avoid losing clients to automated investment services.
As per GlobalData’s 2019 Banking and Payments Survey, 4% of UK mass affluent investors regard a robo adviser as their preferred investment provider. This figure remains small in comparison to other channels. Yet it is a stark improvement on 2018, when the survey showed that only 1.3% of investors used a robo adviser as their preferred channel of investment. Robo advisers are evidently holding on to consumers more than ever before.
Robo advisers have been around for almost a decade now, and for most of this time were purely meeting the digital needs of investors. But over the past 12 months, automated investment platforms have upped their game. For example, players such as Nutmeg introduced human advice as part of their proposition in 2018 in respond to consumer demand, giving investors the best of both worlds.
The likes of Moneybox and Wealthsimple have been able to capitalize on the rise in demand for socially responsibly investments, introducing sustainable options to their core propositions. Meanwhile, Wahed Invest has carved out a niche by targeting the UK’s sizable Muslim community, becoming the first digital investment platform to solely invest in Sharia-compliant companies in 2018.
Robo advisers still have a long way to go, as the vast majority of investors still use more traditional channels. But automated services are clearly making a mark, with usage increasing year on year in the UK. And by meeting more than just the digital needs of consumers, these platforms are clearly aiming for longevity. Robo advisers are yet to prove they can bring better returns than traditional channels, but incumbents cannot afford to ignore the rise in demand for automated investment services.
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