A funny thing happened on the way to the robo-adviser revolution. Robo advisers—automated investment services that assess risk tolerance and manage a portfolio of exchange-traded funds at a low cost—are running into the realities of the highly competitive wealth-management market, including thin profit margins. So they are expanding in areas...
Robo-advisors that were launched to service the wealth-management sector are expanding into areas such as “529” college-savings plans and 401(k) retirement plans and adding account features via partnerships or co-branding deals. In some cases, fees for these new services are higher than those charged by traditional providers. Meanwhile, traditional firms are quickly adding automated services, causing consumers to wonder whether robo-services are about branding and customer services or actual technological improvements.