Few professionals in the wealth management field have missed the transformational change that technological advancements and shifting consumer expectations are driving in our business. But even the savviest may have missed the threat that Vanguard has made to the adviser marketplace. The company is now seeing $1.6 billion in monthly inflows from its robo-adviser business, charging only 30 basis points, and has amassed a total $30 billion in planning assets.
In one year Vanguard has eclipsed all the robo-advisers combined in assets under management. The behemoth dominating the mutual fund market is about to eat our lunch.
For all of us, Vanguard’s backdoor disruption of the advisory business is a key trend to watch, and the company is a formidable competitor to position against. It is demonstrating how robo-advisers — originally viewed as a commoditized channel rather than a substantive threat to the client relationship — are fast becoming an effective entry point