Increased competition from low cost robo-advisors and interactive online investment platforms is forcing traditional wealth advisors to adopt innovative technology solutions to compete (AI, machine learning and cognitive computing). As a result, hybrid robo-advisory platforms are being established by wealth management divisions of money-center banks. Emerging technology will continue to appeal to more tech-savy investors, including the millennial generation.
According to the Securities Industry and Financial Markets Association’s (“SIFMA”) 2018 Outlook report, Robo advising is projected to grow in the U.S. to $2.2T by 2020 from $300B in 2016, a 49% CAGR.
- Current revenue growth rate exceeds the average of the last 3 years, indicating that market momentum is increasing
- Current gross profit margin is less than the average of the last 3 years gross profit margins, indicating customer pricing power
- Current EBITDA margin exceeds the average of the last 3 years EBITDA margin, a condition that may attract new entrants