Australian wealth managers are lowering costs due to robo-advisers
Australian wealth managers are feeling the pinch as robo-advice adoption rates are on the rise among the wealthy.
Robo-adviser services are no longer the reserve of the retail segment, as Australia’s rich are increasingly open to digital channels and to spreading their fortunes across providers. Data from GlobalData’s Global Wealth Managers Survey shows that Australian high-net-worth (HNW) investors now use an average of four different providers, as the uptake of automated investment services is increasing.
This has a significant impact on traditional players’ bottom lines. Not only are wealth managers losing market share to robo-adviser services, but these players’ low-cost business models are putting pressure on traditional providers’ margins. Our data shows that eight out of 10 wealth managers agree that HNW clients are increasingly fee-sensitive due to the rise in robo-adviser services. Accordingly, 76% of wealth managers in Australia (compared to 61% globally) indicated that they have lowered or are planning on lowering their fees to compete with automated investment services.
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