One of the hottest areas in asset management is the emergence of new robo-advisor apps that help clients build and manage their investment portfolios.

There are now over 349 robo-advisor apps active worldwide, including 200 in North America. Why is there so much momentum behind the creation of these financial advisor apps?

Better Investment Advice

One key consideration of any financial services firm is being able to offer the best possible advice to clients – and then being able to act on this advice quicker than the competition. That’s the primary allure of robo-advisors. They are able to use sophisticated algorithms that take into account a large number of factors – everything from a client’s risk-reward profile to current trends in the financial marketplace – in order to make the “perfect” investment decision. Now that many robo-advisors are powered by artificial intelligence (AI), it’s becoming increasingly likely that these robo-advisors are going to be far more intelligent than human advisors when it comes to analyzing the market and making the right decisions.

Superior Scalability

Another key success factor for any financial services firm is being able to grow and “scale” a business. The ultimate goal, of course, is to have as many assets under management (AUM) while having the lowest possible cost base. And that’s what you can achieve with a robo-advisor. Building a robo-advisor mobile app is all about scalability. Unlike a traditional asset management business, in which the size of the company is really constrained by how many clients each human advisor can manage, there is theoretically no limit to how many clients a robo-advisor app can manage.

Ability to Service Different Customer Segments

It’s also possible during the process of building a robo advisor app to customize it for different customer segments. There is a very big difference between what a young millennial investor might be looking for and what a large High Net Worth Individual (HNWI) might be looking for. Most likely, a HNWI is looking for advanced hedging strategies that will preserve wealth, while a new investor is looking for riskier assets that can lead to rapid wealth accumulation. With a robo-advisor, it’s much easier to build in the needs and requirements of these different customer segments.

Better Customer Journeys

The term “robo-advisor” might conjure up an image of a cold, impersonal bot that is simply very intelligent at making investment decisions. Many asset management firms have found that these robo advisors are also very good at client communication, portfolio reporting, and moving customers along the customer journey.

Using a well designed robo-advisor app, customers will feel as comfortable that their needs are being met as with a traditional investment advisor. Especially with higher net worth individuals, there is a need for regular client communication to build the relationship, and that’s exactly what robo-advisor apps can offer.

In short, building a robo-advisor app can be a great way to grow and scale your asset management business. It is a way to offer superior investment advice as well as a superior customer experience. That’s why financial advisor apps are gaining popularity with mainstream investors as a way to manage their portfolios better and more effectively.


Click here to learn about how we built Drip, a robo-advisor for millennials.