LONDON, Nov. 10, 2016 /PRNewswire/ -- The UK has recently seen the emergence of automated investment management propositions, and perhaps lays claim to having the leading automated advice proposition, albeit limited to at retirement decision only. It enjoys several important advantages for robo advisors including a large saving pool, an innovation-friendly culture, and a push from regulators and Government to look for solutions to fill the advice gap. We discuss all of these factors in detail in this chapter, and look at the future both in terms of the potential size of the market and the likely winning service models.
The robo advice market in the UK is still very much in its infancy. The first UK automated investment management proposition, Nutmeg, was founded in 2011 and launched in 2012, and since then the market has seen a number of launches, with activity increasing significantly in 2016. We have yet to see a large player enter the market, but all the major banks are signalling interest in development and we expect a lot of activity in the second half of 2016 and into 2017. Likewise, 2016 could also be the tipping point for the automated advice market, with a large number of proposition rumoured to be in development.Based on our analysis of the leading UK players, we believe that total AUM is currently in the region of around $500m, which accounts for much less than a 1% market share. We estimate that market leader, Nutmeg, has around 75% of that total.