The majority of GCC financial advisors do not find robo-advisors a threat to their business, a new study has revealed.
According to EY’s GCC Wealth and Asset Management 2017, about 35% saw robo-advice as an opportunity for their business in 2017 while 22% saw robo-advisors as a threat to their business. These figures indicate that wealth managers are finding ways to integrate artificial intelligence into their operations to attain optimum results.
“Adapting early to the new reality will open the door to profitable future growth opportunities,” says George Triplow, EY MENA Wealth and Asset Management Leader. “The leaders will be those who harness blockchain, automated-advice, artificial intelligence and robotic process automation. The recent focus on particularly for crypto in the region set the scene for a dynamic landscape for institutions moving forward.”
The report noted that digital wealth managers will control approximately one third of the global wealth management industry in 2025, and traditional wealth managers would be driven out of the market by that time. The key to sticking around is to adopt robo-advisory technology and utilize it within traditional wealth advisories.
“Going forward, we can expect to see a large number of asset managers and independent advisors partnering with skilled technology firms that are able to optimize robo-advisor technology much more efficiently than they could do in-house,” says Triplow.
EY also found that more than two thirds of wealth advisors in the GCC are using social media to engage with people, particularly to appeal to an emerging group of people with investable assets—affluent millennials who want to do business and communicate with advisors in less traditional ways.
The global wealth management market for people with more than $1 million to invest is projected to grow from $55.4 trillion this year to $69.6 trillion by 2021.