As robo-advisory finds wide appeal among both new and mature investors in Singapore, financial institutions are opening up to robotic solutions
November 08, 2018 | Bhaskar Prabhakara
- The relevance of robo-driven investment has grown much beyond the original intent and has become an integral part of the business strategy of any wealth manager
- It is estimated that the total assets under management (AUM) under robo-advisory in Asia-Pacific will grow from $ 30 billion to $ 500 billion by 2021
- The market for robo-advisory is at various levels of adoption and maturity across South East Asia
When robo-advisory firms came into the market, it was seen as an opportunity to bring into the investment fold those who have had minimal assets and little experience in investing. But in just a few years, the relevance of robo-driven investment has grown much beyond the original intent and has become an integral part of the business strategy of any wealth manager.
Among the early movers is a Singapore-based brokerage firm, ranked among the top five Asian firms, that is using robo-advisory to cater to both the segments. Besides a transaction fee-based business model for mature investors, it has an advisory fee-based model for both mature and new investors.
Across South East Asia we have seen various classes of investors move towards robo-driven investment platforms, with some markets such as China and Singapore being way ahead of the curve and new markets such as Malaysia and Thailand picking up momentum.
It’s not surprising that Singapore is leading the market, since it has been an eager consumer of technology and financial services. Study findings by Legg Mason Global Investment Survey, that were widely reported here, said that 61 percent of respondents in Singapore have used the services of a financial adviser. This is way above the global average of 46 percent and the Asian average (excluding Japan) of 56 percent. As many as 60 percent said they were “somewhat” or “very” comfortable with using a robo-adviser, as opposed to 57 percent globally and 66 percent in Asia.
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Keywords: Robo-advisory, Technology, Investing, Cybersecurity, AI