Issue link: https://resources.envestnet.com/i/1527630
FOR ADVISOR USE ONLY. NOT FOR PUBLIC DISTRIBUTION. 4 Takeaway By leveraging this trend and combining digital advice with a human touch, RIAs can offer the best of all worlds. New entrants While many RIA firms are merging and being acquired, many outside players are seriously considering entering this profitable space. 5 A good number of these new entrants aim to deliver specialized services, like digital advice and robo-advisors for consumers and lead generation tools that help advisors find clients. Many of these new entrants are leveraging artificial intelligence to help their end clients automate everything from appointment scheduling to portfolio construction. They're also using AI to help advisors connect with clients through AI-driven recommendations and chatbot interactions that free up time. Digital advice models like robo-advisors and hybrid advisors aren't new. They've been around for more than a decade and are the fastest-growing wealth management delivery model, experiencing more than 20% annual revenue growth between 2015 and 2020. 6 Robo advisors only account for around 1% of the market, but investors have become increasingly comfortable with using them. 6 While robo advisors and online advice platforms could be considered threats to RIA businesses, research shows that 93% of investors with human advisors prefer to maintain a relationship with a human advisor. 7 By 2030, as advice becomes increasingly analytics-driven and automated, advisers will shift their focus to comprehensive planning beyond the portfolio. As a result, the number of advisers will drop by up to a fifth. 8 McKinsey & Company, "On the Cusp of Change: North American Wealth Management in 2030"