Robo Advisory Global Market Opportunities and Strategies to 2033

This report describes and explains the robo advisory market and covers 2018-2023, termed the historic period, and 2023-2028, 2033F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global robo advisory market reached a value of nearly $8.23 billion in 2023, having grown at a compound annual growth rate (CAGR) of 32% since 2018. The market is expected to grow from $8.23 billion in 2023 to $32.94 billion in 2028 at a rate of 32%. The market is then expected to grow at a CAGR of 32.9% from 2028 and reach $136.44 billion in 2033.

Growth in the historic period resulted from the growing digitalization in financial services, rise in the number of high net worth individuals, increased internet penetration, rise in globalization and cross-border payments. A factor that negatively affected growth in the historic period was the rise in cyber security concerns.

Going forward, rising penetration of blockchain technology, supporting government initiatives and increasing urbanization will drive the growth. Factors that could hinder the growth of the robo advisory market in the future include regulatory challenges.

The robo advisory market is segmented by service type into direct plan-based/goal-based and comprehensive wealth advisory. The direct plan-based/goal-based market was the largest segment of the robo advisory market segmented by service type, accounting for 61.5% or $5.06 billion of the total in 2023. Going forward, the comprehensive wealth advisory segment is expected to be the fastest growing segment in the robo advisory market segmented by service type, at a CAGR of 34.7% during 2023-2028.

The robo advisory market is segmented by business model into pure robo advisors and hybrid robo advisors. The hybrid robo advisors market was the largest segment of the robo advisory market segmented by business model, accounting for 63.6% or $5.23 billion of the total in 2023. Going forward, the hybrid robo advisors segment is expected to be the fastest growing segment in the robo advisory market segmented by business model, at a CAGR of 33.6% during 2023-2028.

The robo advisory market is segmented by end user into retail investors, high net worth individuals and other end users. The high net worth individuals market was the largest segment of the robo advisory market segmented by end user, accounting for 52.4% or $4.31 billion of the total in 2023. Going forward, the high net worth individuals segment is expected to be the fastest growing segment in the robo advisory market segmented by end user, at a CAGR of 33.7% during 2023-2028.

The robo advisory market is segmented by provider into fintech robo advisors, banks, traditional wealth managers and other providers. The fintech robo advisors market was the largest segment of the robo advisory market segmented by provider, accounting for 45% or $3.7 billion of the total in 2023. Going forward, the traditional wealth managers segment is expected to be the fastest growing segment in the robo advisory market segmented by provider, at a CAGR of 36.1% during 2023-2028.

North America was the largest region in the robo advisory market, accounting for 46.4% or $3.81 billion of the total in 2023. It was followed by Western Europe, Asia Pacific and then the other regions. Going forward, the fastest-growing regions in the robo advisory market will be Asia Pacific and Western Europe where growth will be at CAGRs of 36.6% and 33.2% respectively. These will be followed by North America and Middle East where the markets are expected to grow at CAGRs of 30.3% and 23.8% respectively.

The global robo advisory market is concentrated, with a small number of players dominating the market. The top ten competitors in the market made up to 47.63% of the total market in 2022. The market concentration can be attributed to the presence of large number of players in different geographies. Prominent players are acquiring the products and entering into partnerships with the other companies to consolidate their market positions across the globe, while others are distributing products. The Charles Schwab Corporation was the largest competitor with a 17.4% share of the market, followed by The Vanguard Group, Inc. with 11.5%, Fidelity Management & Research Company (FMR LLC) with 8%, BlackRock, Inc. with 4.7%, Betterment Holdings Inc with 2.3%, Ally Financial Inc with 1.4%, Wealthfront Inc. with 1%, Empower Personal Wealth (Personal Capital Corporation) with 0.7%, SigFig Wealth Management with 0.5% and SoFi Investment with 0.3%.

The top opportunities in the robo advisory market segmented by service type will arise in the direct plan-based/goal-based segment, which will gain $13.84 billion of global annual sales by 2028. The top opportunities in the robo advisory market segmented by business model will arise in the hybrid robo advisors segment, which will gain $17.01 billion of global annual sales by 2028. The top opportunities in the robo advisory market segmented by end user will arise in the high net worth individuals segment, which will gain $14.1 billion of global annual sales by 2028. The top opportunities in the robo advisory market segmented by provider will arise in the fintech robo advisors segment, which will gain $11.31 billion of global annual sales by 2028. The robo advisory market size will gain the most in the USA at $9.51 billion.

Market-trend-based strategies for the robo advisory market include focus on developing and introducing innovative product solutions for banking or credit card customers, focus on integrating the latest technologies, such as artificial intelligence (AI) and machine learning (ML) into robo advisory, focus on developing and introducing a robo advisory function with big data analytics, focus on strategic partnerships and collaborations and focus on introducing robo advisory investment platforms.

Player-adopted strategies in the robo advisory market include focus on enhancing its operational capabilities through the launch of new products, focus on strengthening its business operations through securing new contract, focus on enhancing its operational capabilities through business restructurings and on expanding its business operations through strategic acquisitions.

To take advantage of the opportunities, the analyst recommends the robo advisory companies to focus on hybrid robo advisors for unprecedented growth, focus on AI-driven robo-advisors for streamlined financial solutions, focus on data-driven robo-advisory for enhanced customer solutions, focus on robust robo advisory platforms for holistic financial planning, focus on comprehensive wealth advisory for rapid growth, expand in emerging markets, continue to focus on developed markets, focus on strategic collaborations for market expansion, focus on diversifying distribution channels for robo advisory services, provide competitively priced offerings, focus on strategic pricing precision for robo advisory services, participate in trade shows and events, continue to use B2B promotions, leverage educational content for investor empowerment, amplify transparency in marketing communication and focus on cultivating personalized advisory for high net worth individuals.