Robo-advice prospering with younger generations

Micro-investing and robo-advice platforms have become popular among younger investors and will continue to prosper, according to a report from Finder.

The report found apps such as Raiz Invest and Spaceship Voyager had seen growth in this market, particularly among younger generations who lacked sufficient savings to enter the traditional share market, and this had led to greater use of robo-advice.

“Micro-investors could choose to invest small amounts periodically, rather than a large sum of money at once,” the report said.

“The proliferation of digital investment platforms has also made financial management more accessible to a population that is increasingly addicted to screens.

“According to Google insights, smartphone users have an average of 2.5 finance apps downloaded on their phone, and nearly three-quarters of users (73%) regularly use an app to manage their finances.”

The report found as consumers increasingly turned to their phones for financial advice, the market for investment robo-advisers had flourished.

“Like traditional financial planners, robo-advisers provide tailored financial advice, but at a fraction of the cost,” the report said.

“The platform uses a mix of algorithms and background analysis to customise an investor’s portfolio, and then continuously re-balances the portfolio to ensure alignment with the investor’s financial goals.

“KPMG has predicted that robo-advisers manage around USD$2.2 trillion ($2.9 trillion) worth of assets, and the market is rapidly growing.”