Over the past six years, some 180 million individuals have embraced the world of robo-advisors, a revolutionary tool for developing trading strategies, acquiring stocks, and expanding investment portfolios. Remarkably, nearly one-fifth of these enthusiasts hail from the United States, the global epicenter of the robo-advisory market. While the phenomenon of digital wealth management has garnered international acclaim, it's Americans who have taken the lead, pouring significant sums into robo-advisor platforms.
AltIdex data shows that Americans invested an average of $70,000 through robo-advisors last year, a sum that outpaces their European counterparts by a factor of five and dwarfs the Chinese by a factor of nine.
Expected surge in average AUM per user within the US robo-advisor arena
In the era before robo-advisors participation in stock market investing was limited to either those with the financial means to hire expert guidance or those with the know-how to self-manage their own portfolios. However, the advent of robo-advisor platforms has democratized stock market investing, making it accessible to individuals who want to invest without the burden of active management. Algorithms deftly adjust risk profiles, make data-driven decisions, and optimize returns, bringing millions of people into the world of stock trading.
A Statista study reports an astounding 1,190% increase in total assets under management (AUM) by robo-advisors between 2017 and 2022, catapulting from $187 billion to an impressive $2.45 trillion globally. The lion's share of this meteoric rise is attributed to the United States, which consistently outpaces all other nations in robo-advisor investments.
Last year, American investors poured an average of $69,174 into robo-advisors, a figure that dwarfs the European market, where the average AUM per user is a modest $12,931. Meanwhile, the Chinese market lags far behind, with an average AUM per user of $7,552.
Statista's forecast predicts that Americans will continue to adopt robo-advisors causing the average AUM per user to increase by nearly 70% reaching an impressive $116,000 by 2027. The European market is also expected to grow by 55% over the same period, pushing average AUM per user to $19,890 over the next four years. Conversely, China's robo-advisory growth is expected to plummet due to regulatory constraints, with Statista forecasting a 40% decline in average AUM per user to $4,461 over the next four years.
US takes the helm in average AUM, while Europe eclipses in user growth
While the United States continues to dominate the robo-advisory landscape in terms of average AUM, Europe has the distinction of eclipsing all others in terms of total users. Last year, approximately 30 million Americans used robo-advisors to manage their financial assets. Statista expects another 20 million Americans to join the ranks over the next four years, bringing the total user base to nearly 50 million.
In a contrasting trend, the European market is poised for significant user growth, projected to swell to 61.7 million users by 2027, a notable jump from the 43.87 million users recorded in 2022.
