Ranks of new customers are dwindling, jeopardizing US robo-advisors' ability to attract new wealth. This report details how robo-advisors can expand into new products and services to boost customer acquisition and revenues.

Learn about how digital brokerages are changing and what's going on in the robo-advisor space. "In Other News," we discuss how banks should address personalization and how digital engagement with wealth management is changing. Tune in to the discussion with our analyst Michael Tattersall.

Despite the availability of fully digital wealth offerings from robo-advisors, investors still want the human touch: 37% of global wealth management clients surveyed by EY in April 2021 indicated a preference for a combination of human and digital servicing—and this surges to 57% for UHNWIs.

With robo-advisors offering retail account opening that takes minutes, wealth managers that cater to HNWIs are under pressure to speed up their time-intensive onboarding processes. According to a 2020 Fenergo and WealthBriefing survey cited by Capgemini, 28% of wealth management firms took more than 20 days to onboard an HNW client. Some of the lag owes to HNWIs’ more complex financial situations.

John Lewis will leverage its trusted brand and larger customer base to launch a robo-advisor with JPMorgan-owned Nutmeg, reducing its reliance on brick- and-mortar to drive revenue.

Co-founder and CEO Andrew Chau noted that average Canadian retail investors have historically had to choose between robo-advisors “offering basic products that only match the market and its volatility” and “antiquated big bank products” like high-fee mutual funds. The bigger picture: Earlier this week, the challenger said it has revamped its bank account, Neo Money.

A majority of Gen Zers (57%) perceived robo-advisors as a convenient way to invest (Vanguard). More than half of Gen Zers would consider using a robo-advisor for their investments (Vanguard). 29% of Gen Zers would prefer a robo-advisor over a traditional financial advisor, compared with just 18% of all consumers surveyed (MagnifyMoney).

According to MagnifyMoney, 29% of Gen Zers would prefer a robo-advisor over a traditional financial advisor, compared with just 18% of all consumers surveyed. Gen Zers tend to distrust conventional financial institutions and question whether these companies really understand their attitudes and needs.

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.

Their expectations for digital products—millennials are twice more likely than older investors to consider using a robo-advisor—as well as the growing success of competitors like startup robo-advisors will hold incumbents to a much higher standard on digital user experiences.

Incumbents try their luck with robo-advisors (2/18). The pandemic changed the investing game. It’s unclear whether the industry will be able to sustain the influx of investors and money, but the disruption pushed incumbents to keep up with the times, which Goldman’s Marcus did with its robo-advisory services. It’s time to talk about greenwashing (12/2).

The robo-advisor surpassed £3 billion ($3.85 billion) in AUM, and it could use open banking to automate how users fund their investment accounts to further grow its AUM and break even.