The growth of investment robo-advisors—algorithm-based account services—spiked last year across the US, the UK, and Canada as investors, especially those belonging to younger populations, took advantage of investment opportunities during the pandemic. For instance, independent robo-advisors Wealthfront and Betterment both reported double-digit increases in account openings during the pandemic.
“Robo-advisors, well adapted to operating digitally, were able to cater to previously underserved customers like younger investors who are in the early stages of wealth accumulation,” said Shelleen Shum, eMarketer senior forecasting director at Insider Intelligence. “Robo-advisors are also attractive because they are often quicker to adjust investment holdings in real time with the use of algorithms.”
US
This year in the US, 3.5 million adult investors will use a robo-advisor to handle their portfolio. That’s up by 23.2% over 2020, which saw record growth of 37.4%. The growth rate in the US will stay in the double digits for another two years, putting usage on pace to surpass 5 million adults by 2025.