Robo-advisors and wealth management

• Main Authors: PHOON, Kok Fai, KOH, Cher Chiew Francis
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2018
• Subjects: Finance and Financial Management; Portfolio and Security Analysis; Technology and Innovation
• Online Access: https://ink.library.smu.edu.sg/lkcsb_research/6502; https://ink.library.smu.edu.sg/context/lkcsb_research/article/7501/viewcontent/Robo_advisors_av.pdf
• Institution: Singapore Management University

The recent rise of robo-advisors (RAs) has threatened the traditional fund and wealth management industry. RAs' assets under management (AUM) have risen manyfold through competitiveness on pricing, transparency and services and better expected returns linked to the use of quantitative finance and technology with less subjective human intervention. This article examines the postulation that RAs have an edge over traditional wealth managers. RAs can combine the judgement and computing resources of both human and machine, or bionic power, to provide alternative wealth management services to meet the diverse needs of private wealth clients. However, the authors expect traditional wealth managers to respond by providing new and improved customized and integrated services at competitive fees.