The market for robo-advice is poised to explode, according to a new Deloitte forecast.
The consultancy predicts robo-advice could grow to be a $5 trillion to $7 trillion segment by 2025 in the United States, representing 10% to 15% of U.S. retail assets under management.
And Deloitte says this estimation could be conservative.
This is massive compared to today. Deloitte’s research shows that robo-advice now accounts for less than $100 billion of the $32 trillion U.S. retail assets under management.
Deloitte predicts that in 2025 there will be $51 trillion retail AUM in the U.S., and 10%-14% of that will belong to robo-advice.
Deloitte comes at this estimation through two different routes.
Because robo-advice has a special appeal to a new generation of investors, including Generations X and Y, Deloitte looked at these two generations.
According to its research, Gen X and Gen Y will account for one-third of all U.S. retail assets under management within 10 years.
“If you assume 20% to 30% penetration rates for robo-advice, you get to $5 to $7 trillion,” the report concludes.