Date Posted: Jan 18, 2023

Fintech Report Special Feature—Continued Rise of the Robo-advisor

Robo-advice pioneers in the United States Betterment and Wealthfront first launched innovative direct-to-consumer automated financial advice services in 2011, while in Canada, robo-advice found its way to market in 2014, a year which saw trailblazers break onto the scene offering low pricing and a degree of accessibility rarely found in wealth management. More than eight years have now passed, and in both Canada and the United States, robo-advice has grown significantly since its birth.

While growth remains on the horizon for the robo-advice channel in Canada, the stellar growth experienced by the channel will not go on forever. The inevitable truth is that one way or another, Canadian robo-advisors will have to find new ways to capture a larger share of assets and clients, whether that be through hybrid models, targeting older segments or finding other ways to differentiate themselves. Some of the robo-advisors in the channel have already turned their attention to various strategies and models, while continued technological advancements such as developments in artificial intelligence may be an avenue robo-advisors choose to explore to enhance current features and capabilities. In either case, the next few years will prove to be crucial to the channel, as firms navigate the current crossroads in hopes of fulfilling the channel’s potential.

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