In a subsection of the report titled ‘Decoding Robo-Advisers’, CFA Frank Fuxing Wang described robo-advice as a “low marginal-cost wealth management service via the internet and mobile devices with the help of internet technologies, big data analysis, quantitative financial models and algorithms”.
Robo-advice is the “perfect combination of technology and finance”, Mr Wang said.
But while the sector has seen rapid development in past years and has received “huge investments” from venture capitalists, its short-term profitability (particularly in China, where there are significant regulatory roadblocks) is hard to envisage.
“Customers have not fully accepted the concept of asset allocation and robo-advisory service,” Mr Wang said.
“Robo-advising, therefore, still has a long and tortuous way to go; along the way, there will be difficulties and challenges.
“We must face these challenges, educate and guide our customers toward better understanding of investment and wealth management, provide them with advanced technologies and services, and expedite the market toward maturity.
“Robo-advising is an excellent example of how technology can help us achieve better finance. It will surely become a milestone in the development of the wealth management market.”
