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Original report with 163 pages
Plus comprehensive data appendix
Benchmarking – Ranking – Recommendations
www.MyPrivateBanking.com
November 2016
Francis Groves
Senior Analyst
LEADING ROBO-ADVISORS
WORLDWIDE
BENCHMARKING THE CURRENT
ROBO-ADVISOR LANDSCAPE AND
MAPPING THE ROAD AHEAD
ROBO-ADVISOR BENCHMARKING│ 2
ROBO-ADVISOR BENCHMARKING│ 3
TABLE OF CONTENTS
1.0 EXECUTIVE SUMMARY 8
2.0 RANKING 11
3.0 METHODOLOGY 13
3.1 INTRODUCTION 13
3.2 SELECTION OF ROBO-ADVISORS 13
3.3 EVALUATION, STRUCTURE AND APPROACH 15
3.4 EVALUATION CRITERIA – WEBSITES 17
3.5 EVALUATION CRITERIA – SMARTPHONES 18
3.6 CLIENT CONTACT, SOCIAL MEDIA AND LOYALTY INITIATIVES 20
3.7 BEST PRACTICES 22
3.8 PROFILE CONTENTS AND STRUCTURE 22
4.0 SUMMARY OF FINDINGS 23
4.1 HEATMAP OF ROBO-ADVISOR PERFORMANCE 23
4.2 OVERALL PERFORMANCE 24
4.3 OVERALL WEBSITE PERFORMANCE 25
4.4 OVERALL MOBILE PERFORMANCE 32
4.5 OVERALL PERFORMANCE IN CONTACT, SOCIAL MEDIA, AND CLIENT LOYALTY 33
5.0 STRATEGIC ANALYSIS 38
5.1 THE CLIENT ONBOARDING JOURNEY 38
5.2 THE HEADLINE VIEW: HOW WELL ARE ROBOS PERFORMING? 40
5.3 STRATEGIC INSIGHT: THE SPECIFICS 44
6.0 CLIENT ASSESSMENT UNDER THE SPOTLIGHT 52
ROBO-ADVISOR BENCHMARKING│ 4
7.0 STRATEGIC FORECASTS 56
7.1 ROBO-ADVISOR PROMOTION AND MARKETING 56
7.2 PROVIDER COMPARISONS 58
7.3 SUCCESSFUL ROBO-ADVISOR CLIENT JOURNEYS 58
7.4 REGULATION 59
7.5 THE ‘LIFE EXPECTANCY’ OF ROBO-ADVISORS 60
7.6 CONSULTATIONS WITH PROFESSIONALS 61
7.7 ROBO PLATFORMS OF EXISTING INSTITUTIONS ARE ON A DIVERGENT PATH 61
7.8 TECHNOLOGY DEPLOYMENT 62
7.9 DELIVERING DISTINCTIVE CLIENT EXPERIENCE 63
7.10 ROBO-ADVISORY ASIAN EXPANSION 63
7.11 AREAS OF GREATEST VULNERABILITY 64
8.0 RECOMMENDATIONS 66
9.0 BEST PRACTICES 67
9.1 CLIENT ASSESSMENT AND PORTFOLIO RECOMMENDATION 67
9.2 KNOWLEDGE CONTENT AND INVESTOR EDUCATION 69
9.3 OTHER 71
10.0 PROFILES 72
10.1 ALPHA ARCHITECTS (USA) 72
10.2 BETTERMENT (USA) 75
10.3 BMO SMARTFOLIO (CANADA) 78
10.4 CAPITAL ONE INVESTING MANAGED PORTFOLIOS (USA) 81
10.5 CONNECT INVEST - CSB (USA), OFFERED BY SIGFIG WEALTH MANAGEMENT 84
10.6 FIDELITY GO℠ (USA) 87
10.7 HONEST DOLLAR (USA) 90
10.8 INDEXA CAPITAL (SPAIN) 93
10.9 INVESTIFY (LUXEMBOURG) 96
10.10 KEYPRIVATE (BELGIUM) 99
10.11 MIZUHO SMART FOLIO (JAPAN) 102
10.12 MONEYFARM (ITALY) 105
10.13 NETWEALTH (UNITED KINGDOM) 108
10.14 NUTMEG (UNITED KINGDOM) 111
10.15 PRITLE (NETHERLANDS) 114
10.16 QUIETGROWTH (AUSTRALIA) 117
10.17 QUIRION (GERMANY) 120
ROBO-ADVISOR BENCHMARKING│ 5
10.18 RBC INVESTOR GATEWAY™, POWERED BY FUTUREADVISOR (USA) 123
10.19 ROSECAP (USA) 126
10.20 SCALABLE CAPITAL (GERMANY) 129
10.21 SCHWAB INTELLIGENT PORTFOLIOS (USA) 132
10.22 SYGNIA (SOUTH AFRICA) 135
10.23 TRUEWEALTH (SWITZERLAND) 138
10.24 VAAMO (GERMANY) 141
10.25 VÉRIOS INVESTIMENTOS (BRAZIL) 144
10.26 VZ VERMÖGENSZENTRUM FINANZPORTAL (SWITZERLAND) 147
10.27 WEALTH HORIZON (UNITED KINGDOM) 148
10.28 WEALTHBAR (CANADA) 153
10.29 WEALTHFRONT (USA) 156
10.30 WESAVE (FRANCE) 159
AUTHORS 162
DISCLAIMER 163
To order the full report, please click here.
ROBO-ADVISOR BENCHMARKING│ 6
TABLE OF CHARTS
Ranking of the 30 robo-advisors 12
Robo-advisor evaluation structure 15
Heat map of robo-advisor performance 23
Total number of achievable points 24
Performance: Locating the website 25
Performance: Fee & cost information 26
Performance: Product & process information 27
Performance: Client assessment survey 28
Performance: Client assessment recommendation 29
Performance: Knowledge content & methodology 30
Performance: User experience 31
Overall mobile performance 32
Performance: Mobile Functions 32
Overall performance in contact, social media, and client loyalty 33
Performance: Customer service & contact 34
Performance: Professional service & consultation 35
Performance: Social media platforms 36
Performance: Loyalty strategies & rewards schemes 37
The basic elements of the robo onboarding journey 38
Average scores across five key areas 40
Good product and process information rarely coincides with good knowledge content 42
XXX: a hub to be proud of 46
Variations of professional consultations 49
XXX Investment Strategy Simulation 53
XXX Risk Speedometer 54
XXX ‘Portfolio Review’ 56
XXX innovative client assessment survey 67
XXX Virtual Account 68
XXX monthly email for a suggested portfolio 69
XXX Financial Planning Tools 70
XXXapproach to target audience 71
Key facts Alpha Architects 73
Key facts Betterment 76
Key facts BMO Smartfolio 79
Key facts Capital One Investing Managed Portfolios 82
Key facts Connect Invest 85
Key facts Fidelity Go 88
Key facts Honest Dollar 91
Key facts Indexa Capital 94
Key facts Investify 97
Key facts Key Private 100
Key facts Mizuho Smart Folio 103
ROBO-ADVISOR BENCHMARKING│ 7
Key facts MoneyFarm 106
Key facts Netwealth 109
Key facts Nutmeg 112
Key facts Pritle 115
Key facts QuietGrowth 118
Key facts Quirion 121
Key facts RBC Investor Gateway 124
Key facts Rosecap 127
Key facts Scalable Capital 128
Key facts Schwab Intelligent Portfolios 133
Key facts Sygnia 136
Key facts TrueWealth 139
Key facts Vaamo 142
Key facts Vérios Investimentos 145
Key facts VZ Finanzportal 148
Key facts Wealth Horizon 151
Key facts WealthBar 154
Key facts Wealthfront 157
Key facts WeSave 160
SUMMARY
ROBO-ADVISOR BENCHMARKING │ 8
1.0 SUMMARY
“The robo-advisory model is at a
tipping point with all current
players needing further
development if the robo concept
is to prove long-lasting. Without
further refinement on the part
of individual robo-advisors
themselves, a substantial
portion of current providers will
have difficulties succeeding in
the long-term. “
This is one of the main findings of our report,
where we analyzed and ranked 30 leading robo-
advisors worldwide, which were purposely
selected to achieve a balance in the following
ways: global coverage, provision for different
investor market segments, pure as opposed to
hybrid robos, and standalone platforms and those
provided by large institutions or third party
specialists.
The global benchmarking of robo-advisor platforms
is carried out under the following headline topics:
user-friendliness, the quality of the content;
contact and interactivity, social media integration
and as well mobile accessibility and availability. The
report identifies plenty of examples of good
practice at the level of these individual areas.
However, no providers are yet coming close to
offering an end-to-end consistent level of
excellence. We see that most robo-advisors are
good at some features, but at the same time
missing out completely on other important ones.
While this was tolerated by clients at the start of
the robo-advisor breakthrough, they now demand
a top-performance throughout the full process,
from comprehensively explaining the services to
superior portfolio reporting.
SCHWAB INTELLIGENT PORTFOLIOS, INDEXA
CAPITAL AND NUTMEG ARE TOP RANKED
ROBO-ADVISORS
MyPrivateBanking’s ranking of 30 robo-advisors
from 15 countries awarded the highest scores to
these three platforms:
Schwab Intelligent Portfolios (USA) – exhibiting great strengths in the key areas of product and process information and client assessment plus user experience (43 points out of 60).
Indexa Capital (Spain) – a good ‘all-rounder’ with a solid performance in all areas (42 points).
Nutmeg (UK) – Another example of excellent product and process information coupled with being one of the top three providers of investment knowledge and education (42 points).
The report offers the full ranking of the 30 robo
advisors incl. a data appendix detailing the findings
for each criteria. The results are further illustrated
by featuring core elements of the digital presences
of the best ranked robo-advisors.
MOST ROBO-ADVISORS FAIL TO OFFER A
USER FRIENDLY PERFORMANCE ACROSS
THE FULL PROCESS AND ALL CHANNELS
However, with more than a third of the evaluated
firms achieving less than half of the possible
points, and the highest scoring robo-advisor
scoring slightly less than 75% of the maximum
available points, MyPrivateBanking sees
considerable room for improvement and the
report details where the problems are and how
these can be fixed.
The report’s evaluation covered 39 different
criteria and assessed the performance overall
including for the robo-advisors’ websites, mobile
apps and social media channels. The key research
findings are troubling such as that none of the
SUMMARY
ROBO-ADVISOR BENCHMARKING │ 9
platforms evaluated have yet developed the robo-
advisory model of client recruitment to its full
potential are detailed in the report.
In respect to robo-advisors offered by well-
established institutions the report sees the need
for leading institutions to be more radical and
wholehearted in their automated investment
initiatives in the next few years, even if this means
starting over again with a second robo-advisor to
replace their first. Our analysis lays-out the reason
for this reluctant adoption of technology by
traditional firms, benchmarks their offerings and
offers them learning points they can take from the
platforms offered by new, stand-alone robo-
advisors.
In addition to our overall diagnosis of the state of
health of the robo-advisor model and providing
individual profiles (with analysis and
recommendations) for the 30 platforms evaluated,
this report includes a detailed summary of all of
our findings and a detailed strategic analysis of the
current level of robo-advisor development. This
not only gives our overview of how robo-advising is
developing but also interprets the different
components of the robo client experience and
suggests underlying reasons for the current
standard of performance.
ONLY ROBO-ADVISORS CONSTANTLY
PUSHING AHEAD FOR SUPERIOR CLIENT
EXPERIENCE WILL SURVIVE
Our analysis shows that the pioneer years of robo-
advisors have come to the end and the market will
separate the wheat from the chaff. Too many
automated investment services target the same,
growing - but still not sufficient - client segment to
nurture all or most of them. Still, we also see that
the disruption capabilities of robo-advisors are
here to stay and the appeal to clients will grow for
good reasons.
The report offers a number of detailed forecasts
for the robo-advisory sphere over the next few
years covering topics such as regulation, the
introduction of consultations with (financially)
qualified professionals, the role of financial
planning functionality, and technology and
innovation. It additionally provides our views on
the major external threats facing robo-advisors
currently.
Based on our in-depth benchmarking and a
detailed strategic analysis of status and future of
the robo-advisors development, this report
concludes a series of recommendations for robo-
advisors – stand-alone as well as those who are
part of an established financial services – to ensure
they will be on the winning side in the future.
RANKING
ROBO-ADVISOR BENCHMARKING │ 10
2.0 RANKING
RANK ROBO-ADVISOR TOTAL POINTS
(MAX: 60)
1 Schwab Intelligent Portfolios (USA) …
2 Nutmeg (UK) …
2 Indexa Capital (Spain) …
4 … 41
4 … 41
4 … 41
4 … 41
4 … 41
9 … 39
9 … 39
11 … 37
12 … 36
12 … 36
12 … 36
12 … 36
16 … 35
17 … 32
17 … 32
19 … 31
20 … 29
20 … 29
20 … 29
RANKING
ROBO-ADVISOR BENCHMARKING │ 11
RANK ROBO-ADVISOR TOTAL POINTS
(MAX: 60)
23 … 28
24 … 26
24 … 26
24 … 26
27 … 25
28 … 24
29 … 21
30 … 20
Ranking of the 30 robo-advisors
METHODOLOGY
ROBO-ADVISOR BENCHMARKING │ 12
3.0 METHODOLOGY
3.1 INTRODUCTION
Although this is MyPrivateBanking’s first robo-
advisor benchmarking report, we have now
published several reports, starting in 2014, looking
at different aspects of the robo-advisor
phenomenon. In particular, in our Robo-Advisor
3.0 report, published in June 2016,
MyPrivateBanking shone a bright light on robo-
advisors as, primarily, tools for effectively
onboarding new clients. That insight forms the
foundation of our approach in the current report
(…).
3.2 SELECTION OF ROBO-ADVISORS
Using MyPrivateBanking’s customary approach to
benchmarking in areas such as website design and
mobile delivery, a small team of our researchers
have refined a set of evaluation criteria for robo-
advisor platforms that is relevant both globally and
across the current spectrum of robo-advisors.
In making our selection of robo-advisors,
MyPrivateBanking aimed to reflect the following
factors:
Global coverage – we wanted to include as many countries as possible while still doing justice to those jurisdictions where the robo-advisor is most developed. As a result, we have given special prominence to robo-advisors from the U.S., the birthplace of robo-advisory, but we have also included more than one robo-advisor from Canada, Germany, Switzerland and the UK. At the same time however, we have been keen to cover countries such as Brazil, Japan, South Africa and Spain, where robo-advisors are much less well established.
A balance of pure and hybrid robo-advisors – a key priority in deciding the scope of this report was to cover both pure robo-advisors and hybrid services, where the client journey includes automated elements and personal
contact with qualified advisory staff as part of the process. To fulfil this aim, our analysts deliberately chose 10 hybrid robo-advisors for inclusion in the evaluation.
A balance in terms of ownership – the proportions of robo-advisors that are start-ups and those launched by existing players in the financial industry are 16 of the former to 14 of the latter. However, it should be remembered that where there is a parent company, it is by no means always an industry giant or a household name.
A balance of robo-advisors by age – the report includes robo-advisor pioneers such as Wealthfront and Betterment, plus early disciples such as MoneyFarm and Nutmeg as well as recent (and sometimes very recent) arrivals like Indexa Capital, WeSave and Fidelity Go.
A balance of target market segments – our selection of platforms for evaluation includes a broad spectrum of platforms in terms of market segment that they seek to serve, ranging from new millennial investors beginning with very small accounts to highly paid professionals and HNWIs served by platforms with $100K minimum investment levels.
The role of 3rd party providers – in the following cases our choice of robo-advisor was heavily influenced by the role played by a 3rd party in creating the platform: (…)
METHODOLOGY
ROBO-ADVISOR BENCHMARKING │ 13
Evaluation Methodology
Website Client Contact,
Social Media,
&Loyalty
Initiatives
Mobile
Deployment
Mobile operating
systems OR mobile
responsive design
Mobile Functionality
onboarding
portfolio reporting
fund transfer
individualized
messaging
Locating website
Product/service information
How the platform works
Fees & Costs
Client Assessment
Client Recommendation
Knowledge Content
Investment Methodology
User Experience
Cutting edge digital deployment
Customer service &
client contact
Methods of
contact
Opening hours
Outbound
contact
Professional service
Social media
Number of
platforms
Up-to-date
information
Evidence of
exceptional/excellent
achievement in areas
such as marketing and
promotion, design,
etc.
Best Practices
3.3 EVALUATION, STRUCTURE AND
APPROACH
The underlying structure of our evaluation
comprises three parts (total points 60):
The website – this is the core of our evaluation of the client onboarding journeys provided by different robo-advisor platforms where our analysts aimed to place themselves in the shoes of a laptop, desktop or tablet first time visitor (maximum points available 41).
Mobile (primarily smartphone) service—separating out the level of service for smartphone users is by no means intended to imply that MyPrivateBanking doesn’t expect
investors to onboard using their smartphones or other mobile device.
Contact, social media and client loyalty initiatives—these are the important supporting components of a robo-advisor service that may come into play at varying points in the onboarding process (maximum points available 11).
Best practices—features of outstanding excellence or originality (maximum points available 2).
The remainder of this chapter details the approach used in applying each of the criteria
(More in full report pages 13-22)
Robo-advisor evaluation structure
SUMMARY OF FINDINGS
ROBO-ADVISOR BENCHMARKING │ 14
4.0 SUMMARY OF FINDINGS
In this chapter the overall performance of the
surveyed robo-advisors is detailed and the
following sections go deeper into each of these
three main categories in order to highlight areas
where robo-advisors are doing things right and
those areas where they are falling short.
The following heat map shows the performance of
30 of robo-advisors relative to their peers. The
green indicates areas where advisors performed
especially well while the yellow indicates average
performance and red reveals areas which need
immediate improvement.
(More in full report pages 23-37)
5.0 STRATEGIC ANALYSIS
This section of MyPrivateBanking’s benchmarking
study of robo-advisors report analyzes our
research findings with a view to identifying clear
patterns that shed a light on the development of
the robo-advisor sector and illustrate the major
strengths and weaknesses of automated
investment advice models. We begin with a brief
summary of MyPrivateBanking’s basic
interpretative approach and then move on to
asking what helpful (new) big picture insights and
categorizations of robo-advisors our recent
research makes possible. The latter part of this
chapter will look at the conclusions our analysts
draw from the detailed evaluation findings. In
Chapter 7 we move on to our forecasts of the
robo-advisory trajectory in the next few years.
(More in full report pages 38-51)
6.0 CLIENT ASSESSMENT
UNDER THE SPOTLIGHT
Risk profiling is a much-discussed topic when it
comes to robo-advising. Given that the risk
assessment survey is central to the robo-advising
model, and the fact that we believe that regulators
will be giving it increasing scrutiny in the near
future, we want to take the opportunity to dive
into a bit more detail about trends relating to
client assessment questionnaires we came across
during out analysis.
(More in full report pages 52-55)
7.0 STRATEGIC FORECASTS
Having detailed MyPrivateBanking’s main findings
and, in the previous two chapters, given our
interpretation of the most significant features of
robo-advisory platforms, we now present our key
expectations of automated investment advice in
the near and medium term future.
(More in full report pages 56 to 65)
8.0 RECOMMENDATIONS
(More in full report)
9.0 BEST PRACTICES
(More in full report)
10.0 PROFILES
(More in full report pages 72 to 162)
AUTHORS
ROBO-ADVISOR BENCHMARKING │ 15
AUTHORS
Francis Groves, Senior Analyst, is a team lead for the research on vendors,
mobile apps and online services. His specific research interest is communication
and understanding in relation to finance topics and investor motivation. He has
over 30 years of experience in the field of online business information, having
worked for Reuters, the Financial Times and LexisNexis. Francis speaks at
conferences and events and has published several books and articles. Among
them 'Corporate Actions, A Concise Guide' and 'Exchange Traded Funds, A
Concise Guide to ETFs'. Francis has a degree in History, which he studied at the
London School of Economics.
Onawa Promise Lacewell, Research Associate, has a research focus on the
impact of disruptive technologies on the financial services sector as well as on
consumer behavior and global regulation. A particular focus in her work is the
rise of automated investments services and breakthrough technologies such
as augmented reality. Previously she worked as a Senior Researcher for the
WZB Berlin Social Science Center. She holds a PhD in Political Science with
specializations in comparative politics and quantitative research methods and a Bachelor’s degree in Political
Science with a secondary focus in English.
DISCLAIMER
ROBO-ADVISOR BENCHMARKING │ 16
DISCLAIMER
IMPORTANT NOTICE AND DISCLAIMERS:
NO INVESTMENT ADVICE
This report is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where
such an offer or solicitation would be illegal. This report is distributed for informational purposes only and
should not be construed as investment advice or a recommendation to sell or buy any security or other
investment, or undertake any investment strategy. It does not constitute a general or personal
recommendation or take into account the particular investment objectives, financial situations, or needs of
individual investors. The price and value of securities referred to in this report will fluctuate. Past
performance is not a guide to future performance, future returns are not guaranteed, and a loss of all of the
original capital invested in a security discussed in this report may occur. Certain transactions, including those
involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all
investors.
DISCLAIMERS
There are no warranties, expressed or implied, as to the accuracy, completeness, or results obtained from
any information set forth in this report. MyPrivateBanking GmbH will not be liable to you or anyone else for
any loss or injury resulting directly or indirectly from the use of the information contained in this report,
caused in whole or in part by its negligence in compiling, interpreting, reporting or delivering the content in
this report.
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