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. The robo-advisers have been a boon for many of these companies, which now offer more than $900 million in products through their platforms. 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. 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.
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. The robo-advisers have been a boon for many of these companies, which now offer more than $900 million in products through their platforms. 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.