Only 1% of Australians use robo-advisors now, but 10% (2 million) plan to use one.
Future growth is led by Generation Z and women who increasingly plan to use robo-advisors.
Robo-advisors typically charge around 0.3% p.a. for management, with total fees about 0.4%-0.5%.
Just 1% of Australian adults currently use a robo-advisor, according to Finder’s Consumer Sentiment Tracker (September 2022). However, 10% of Australians plan to use one in the future meaning nearly 2 million Aussies could soon be getting robo-advice.
Which demographics are driving the trend and how much are people investing? Read on to find out.
Quick summary
1% of Australian adults, the equivalent of 255,000 people, currently use a robo-advisor. However, an extra 10% – nearly 2 million people – plan to use one.
Men are currently more likely to use a robo-advisor, but they’re set to become more popular with women.
Assets under management (AUM) in the Australian robo-advice segment are projected to reach $13.2 billion in 2023 and nearly $38 billion by 2027.
Average AUM per user in Australia is $15.8k and is expected to increase by nearly 75% to $27.6k by 2027.
Robo-advisor usage in Australia
1% of Australian adults, the equivalent of 255,000 people, currently use a robo-advisor.
However, an extra 10% – nearly 2 million people – say they plan to use one.
4% say they’ve used a robo-advisor in the past but don’t currently use one or have any plans to.
85% of Australians have never used a robo-advisor and have no plans to.
Robo-advisor usage by demographic
Men are more likely than women to use a robo-advisor (2% vs 1%) and are also more likely to have used one in the past (5% vs 3%).
Women are nearly twice as likely to have plans to use a robo-advisor (12% vs 7%), meaning robo-advisor use among women could soon be 13% compared to 9% for men.
Generation Y are currently the most likely to use a robo-advisor at 2%, compared to 1% each for generation Z and generation X and 0% of baby boomers.
Adoption among generation Z is expected to hit 20%, much higher than the 14% among generation Y and more than double the expected adoption among generation X (8%) and baby boomers (2%).
Assets under management (AUM) in the robo-advisors segment in Australia are projected to reach $19 billion in 2023 and nearly $38 billion by 2027.
Average AUM per user in Australia is $15.8k and is expected to hit $20k in 2023 and $27.6 by 2027.
Global robo-advised assets are forecast to increase from US$2.6 trillion to US$6.2 trillion by 2027.
About Australian robo-advisors
Australian robo-advisors offer an average of 7 investment solutions.
70% of the available options are diversified, meaning they mix their investments across exposure to shares, property or bonds.
Robo-advisors charge an average fee of 0.3% p.a. for an investment of $10,000. Including other investment fees, this means total fees are likely to be around 0.4%-0.5% p.a.
The ETF brands most used by Aussie robo-advisors are Betashares, iShares and Vanguard.
Sources
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To make sure you get accurate and helpful information, this guide has been edited by
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Susannah Binsted is the head of the Finder Awards program. Previously she was the head of public relations for the international division at Finder. Susannah has a Bachelor of Communication and a Bachelor of International Studies from the University of Technology Sydney.
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