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Jun. 10, 2016
Report: Robo-Advisors 3.0

For Robo-Advisors a Better Customer Journey Becomes Matter of Survival

Robo-Advisor Report 2016

The majority of stand-alone robo-advisors and automated investment platforms worldwide offer their clients the same quality of investment services and client support as traditional banks and wealth managers. Nevertheless, too many robo-advisors demonstrate gaps and weak spots in the critical areas of digital onboarding and client assessment. These are the main findings of the report “Robo Advisors 3.0 - How to Create the Best Customer Journey: From Onboarding to Reporting” for which the Swiss research company MyPrivateBanking Research analyzed the strengths and weaknesses of over 75 active robo-advisors in 13 countries.

We see that robo-advisors are starting up on an almost weekly basis worldwide. However, while the robo phenomenon is here to stay, many of the robo-advisors will not survive. The number of offerings is growing faster than clients’ willingness to shift enough assets to them to make them economically viable. In order to achieve staying power in this game, robo-advisors must offer their prospects and clients a smooth, pleasurable and supportive digital customer journey. But many of today’s players are not meeting these standards and demonstrate gaps and weak spots in particular in the critical areas of digital onboarding and client assessment.

Robo-Advisors show weaknesses in onboarding and assessment of client investment behavior

Our analysis has raised key findings with regard to the digital customer journey of stand-alone robo-advisors. Some of these include:

  • Too strong focus on fast customer acquisition. The average onboarding time at the surveyed robo-advisors is approximately 15 minutes. This strong focus on customer acquisition runs the risk of too shallow collection and data processing during onboarding.

  • Limited approach in the assessment of client investment behavior. Only one third of robo-advisors are using aspects of behavioral finance in their client assessments.

  • Scant support after hours. Only 20% of robo-advisors provide support outside of office hours, which is unsatisfactory for services targeting working age people.

In other areas, such as communication, the analyzed robos show a more satisfactory performance, and many of them are excellent when it comes to knowledge content and customer service.

Client acquisition is rightly seen as the most serious challenge facing the robo-advisory platforms. The real danger is that the cost of acquiring an individual client could exceed the revenue generated from an account over periods of several years. The report analyzes the requirements for successful pathways to client acquisition and makes clear recommendations for successful achievement of each stage of the onboarding pathway.
We also look at new ways in which individual robo-advisors can take advantage of artificial intelligence, mobile apps and client authentication.

In a separate chapter we move on from the factors that we consider essential for client acquisition by almost all robo-advisors. Here we give our analysts’ assessment of key ways in which a robo-advisor team needs to adjust or modulate its approach in order to appeal to the following three hugely important market segments: Millennials, Baby Boomers at or approaching retirement, and High Net Worth Individuals.

Robo-Advisors should focus on Onboarding, Regulation and broader Market Appeal

In researching most of the world’s currently active robo-advisors, our analysts were tasked with delving into each robo-advisor website to research what each platform has to offer from the standpoint of the typical would-be saver/investor.

The report details manifold recommendations on how automated investment services should design their digital customer journey, such as:

  • Keep website visitors focused on the important question at every stage: will they investigate further and take the next step on the onboarding journey

  • Make sure that the USPs enhance their appeal in the market rather than narrowing down the number of potential clients who might be interested in the service.

  • Prepare to be in the regulatory spotlight to a vastly increased extent, by increasing the rigorousness of client assessments.

Traditional financial services firms should take advantage of the need for hybrid models

Stand-alone robo-advisors which offer a clear client onboarding journey, robust assessment and sustained high quality comment and investor education are here to stay. Nevertheless, the long-term prospects of hybrid robo services, which add a substantial human interaction component to the automated client advisory process, are greater than the long-term prospects of stand-alone robo-advisors.

As a consequence we see many opportunities for financial services that succeed in combining automated investment services with their existing personal advisory offerings in an efficient and client segment-specific manner.

Our report allows banks, wealth and fund managers as well as vendors to build on the knowledge gained by the first generation robo-advisors. It will provide them with the data and recommendations required to optimize the digital customer journey throughout all stages and build automated investment services for long-term success.


About the report: The report takes a detailed look at the fundamental challenge of every robo-advisor: how to create a presence that succeeds in persuading website and mobile visitors to become prospective clients and then fully signed-up investors. In a data-driven assessment, the report examines the characteristics, features, and strengths and weaknesses in the digital customer journey of the leading robo-advisors worldwide. The research was carried out on a total of 76 active robo-advisors worldwide: 29 in the US and Canada, 38 in 7 European countries and 9 in the Asia-Pacific region. In addition, the report looks at the coming together of the robo-advisor model with new technologies, such as the use of artificial intelligence for client interaction and narrative generation. More info on report.

 

My Private Banking



Report: Robo-Advisors 3.0

For Robo-Advisors a Better Customer Journey Becomes Matter of Survival

  Jun. 10, 2016

Robo-Advisor Report 2016

The majority of stand-alone robo-advisors and automated investment platforms worldwide offer their clients the same quality of investment services and client support as traditional banks and wealth managers. Nevertheless, too many robo-advisors demonstrate gaps and weak spots in the critical areas of digital onboarding and client assessment. These are the main findings of the report “Robo Advisors 3.0 - How to Create the Best Customer Journey: From Onboarding to Reporting” for which the Swiss research company MyPrivateBanking Research analyzed the strengths and weaknesses of over 75 active robo-advisors in 13 countries.

We see that robo-advisors are starting up on an almost weekly basis worldwide. However, while the robo phenomenon is here to stay, many of the robo-advisors will not survive. The number of offerings is growing faster than clients’ willingness to shift enough assets to them to make them economically viable. In order to achieve staying power in this game, robo-advisors must offer their prospects and clients a smooth, pleasurable and supportive digital customer journey. But many of today’s players are not meeting these standards and demonstrate gaps and weak spots in particular in the critical areas of digital onboarding and client assessment.

Robo-Advisors show weaknesses in onboarding and assessment of client investment behavior

Our analysis has raised key findings with regard to the digital customer journey of stand-alone robo-advisors. Some of these include:

  • Too strong focus on fast customer acquisition. The average onboarding time at the surveyed robo-advisors is approximately 15 minutes. This strong focus on customer acquisition runs the risk of too shallow collection and data processing during onboarding.

  • Limited approach in the assessment of client investment behavior. Only one third of robo-advisors are using aspects of behavioral finance in their client assessments.

  • Scant support after hours. Only 20% of robo-advisors provide support outside of office hours, which is unsatisfactory for services targeting working age people.

In other areas, such as communication, the analyzed robos show a more satisfactory performance, and many of them are excellent when it comes to knowledge content and customer service.

Client acquisition is rightly seen as the most serious challenge facing the robo-advisory platforms. The real danger is that the cost of acquiring an individual client could exceed the revenue generated from an account over periods of several years. The report analyzes the requirements for successful pathways to client acquisition and makes clear recommendations for successful achievement of each stage of the onboarding pathway.
We also look at new ways in which individual robo-advisors can take advantage of artificial intelligence, mobile apps and client authentication.

In a separate chapter we move on from the factors that we consider essential for client acquisition by almost all robo-advisors. Here we give our analysts’ assessment of key ways in which a robo-advisor team needs to adjust or modulate its approach in order to appeal to the following three hugely important market segments: Millennials, Baby Boomers at or approaching retirement, and High Net Worth Individuals.

Robo-Advisors should focus on Onboarding, Regulation and broader Market Appeal

In researching most of the world’s currently active robo-advisors, our analysts were tasked with delving into each robo-advisor website to research what each platform has to offer from the standpoint of the typical would-be saver/investor.

The report details manifold recommendations on how automated investment services should design their digital customer journey, such as:

  • Keep website visitors focused on the important question at every stage: will they investigate further and take the next step on the onboarding journey

  • Make sure that the USPs enhance their appeal in the market rather than narrowing down the number of potential clients who might be interested in the service.

  • Prepare to be in the regulatory spotlight to a vastly increased extent, by increasing the rigorousness of client assessments.

Traditional financial services firms should take advantage of the need for hybrid models

Stand-alone robo-advisors which offer a clear client onboarding journey, robust assessment and sustained high quality comment and investor education are here to stay. Nevertheless, the long-term prospects of hybrid robo services, which add a substantial human interaction component to the automated client advisory process, are greater than the long-term prospects of stand-alone robo-advisors.

As a consequence we see many opportunities for financial services that succeed in combining automated investment services with their existing personal advisory offerings in an efficient and client segment-specific manner.

Our report allows banks, wealth and fund managers as well as vendors to build on the knowledge gained by the first generation robo-advisors. It will provide them with the data and recommendations required to optimize the digital customer journey throughout all stages and build automated investment services for long-term success.


About the report: The report takes a detailed look at the fundamental challenge of every robo-advisor: how to create a presence that succeeds in persuading website and mobile visitors to become prospective clients and then fully signed-up investors. In a data-driven assessment, the report examines the characteristics, features, and strengths and weaknesses in the digital customer journey of the leading robo-advisors worldwide. The research was carried out on a total of 76 active robo-advisors worldwide: 29 in the US and Canada, 38 in 7 European countries and 9 in the Asia-Pacific region. In addition, the report looks at the coming together of the robo-advisor model with new technologies, such as the use of artificial intelligence for client interaction and narrative generation. More info on report.

 

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