• Assets managed by robo-advisors grew at a 22% compound annual rate over the past four years, topping $720 billion, thanks to management fees that are typically 0.40% or less.
• UBS and robo-advisor Wealthfront recently called off their planned merger, with UBS instead investing in Wealthfront. It leaves Wealthfront as one of the largest of the independent robo-advisors.
• Investor accounts at robo-advisors are mostly smaller, and the industry’s slim margins mean scale is necessary for profitability. That’s why most of the larger robo-advisors are wholly owned or affiliated with larger financial services companies. The biggest robo is Vanguard’s, followed by Edelman Financial Engines and Schwab.
• Robo-advisors have their place, and their algorithm-built portfolios will continue to attract assets. But it remains to be seen just how large of a niche they can be, especially as the industry shifts its attention to customization and more personalized financial planning.

Assets Under Management in Robo-Advisors ($B)

Sources: FUSE, Backend Benchmarking, Company reports