This article will asses the impact Robo-Advisory has had on the wealth management industry and will ask if the increasing presence of automated process in financial services represent an existential threat to the jobs of human bankers.

Profits in the wealth management industry have been under pressure ever since the recession in 2007-2008 leading to a decline in Assets under Management (AuM) and profitability.

Accompanying this setback, firms have been exposed to increased regulations and intensified competition from fintech activity.

In an attempt to modernise their appearance and improve revenues many banks are going digital. This has largely involved modernising the banks online presence and digitising the customer wealth experience. They have made it easier for their clients to engage with the bank online, and this is largely where the buck has stopped.

However, some more ambitious actors have sought to use technology in a more effective manner and have turned to Robo-Advisory. Here mathematical algorithms are used to support investment decisions. Some offer advice, whereas others automatically place orders.

When deployed, these robo-advisors have made reasonable profits as the movement of financial institutions towards their usage suggests; it is estimated that the market by 2020 is expected to account for around $3 trillion of Assets under Management. This figure is expected to grow to $16 trillion by 2025.

It is important to note this still only represents a small percentage of the wealth, and by 2025 the share is likely to only consist of around 10% of assets being managed by robo-advisors.

So, whilst human bankers may not be quite on their way out yet, robo-advisory has demonstrated its value as a tool of wealth management. It is here to stay and bankers in this space should be aware that a new paradigm in wealth management lurks just around the corner.