M&A bargains in the abundance the board business are on the ascent as financial backers embrace man-made consciousness.
It’s the rise of the robo-money manager: Artificial intelligence stands to bring major disruption to a wealth management industry already locked in a heated competitive battle for fees and inflows.
A new PwC survey of asset managers and institutional investors warns that 1 in 6 asset and wealth management companies will be bought or shut down in the next five years.
“The tech carnage should be significant,” Paul Meeks, a portfolio manager at Independent Solutions Wealth Management, told Yahoo Finance about AI’s looming impact on the wealth management industry.
Meeks, who has been plowing forward in the industry since the late 1980s, noted that smaller shops will be “forced to consolidate” and spend heavily on “game-changing technology that will replace existing firms if they don’t ‘circle the wagons.'”
Robo-exhorting — where sSophisticated simulated intelligence fueled models get ready financial backers for establishing a strong financial foundation activities today and retirement anticipating tomorrow — are beginning to see that game-evolving innovation.
Vanguard, Schwab (SCHW), Fidelity (FIS), Betterment, and Acorns are among the companies already offering and investing in robo-advising services.
“The strong will get stronger not only because they have the technology vision but because they have the tremendous resources to execute it,” Meeks said. “Schwab and its big peers should have the edge here, but will they deliver?”
PwC sees these investments fueling the rise of the robots: The outfit forecasts robo-advisors will grow to manage a whopping $6 trillion by 2027.
And as more investors embrace this digital investment advice, it’s becoming clear from recent dealmaking activity that money management firms are feeling pressure to bulk up to pool investments in tech and ride out the storm.
There were 341 M&A deals last year in the wealth management industry, up 11% from 2021 and the most in at least a decade, according to investment bank and consulting firm Echelon Partners.
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