Robo-advisors have made investing more accessible than ever thanks to their low-fee cost structure and simple user experience. The number of Canadians using robo-advisors is expected to increase by over 600% in the 10 years from 2017–2027.
Quicky summary:
- The number of Canadians using robo-advisors is forecast to increase from 278,000 in 2017 to 1,993,000 in 2027. This is an increase of 617%.
- The average funds under management per user is also expected to balloon; doubling from $11k in 2017 to $22k in 2027.
- This means that funds under robo-advisor management will hit $44.59 billion within five years.
Robo-advisor market in Canada
- Robo-advisor assets under management in Canada are expected to increase 107% in the next five years, up from $21.53 billion in 2022 to 44.59 billion in 2027.
- AUM is expected to increase by 21% YoY in 2023, 19% in 2024 and 15% in 2025.
- 2021 saw a huge growth in robo-advisor users, up 30% year on year. 2022 is also expected to experience significant YoY user growth of 18%.
- In 2017, the average Canadian robo-advisor user had $11k invested. This is expected to double to $22k by 2027.
- 2021 saw 12% growth in the average funds under management with robo-advisors. This is set to remain largely stable in 2022 with just 1% of YoY growth.
Robo-advisor products in Canada
- The first robo-advisor was launched in Canada in 2014. There are now around 14 robo-advisors available.
- Many robo-advisors have no minimum investment amount. Others have a minimum as low as $1,000.
- Robo-advisors may be members of the Canadian Investor Protection Fund or the Investment Industry Regulatory Organization of Canada, meaning your investment up to a certain amount may be insured.
- Many funds offer socially responsible investing and some even offer halal investing.
Global robo-advisor market
- The United States currently has the most funds under management (FUM) by robo-advisors ($1,164bn), followed by China ($113bn), Japan ($58bn), the UK ($29bn), Italy ($24bn), Germany ($22bn), France ($21bn), South Korea ($17bn), Canada ($16bn) and India ($15bn).
- While the top 10 countries by FUM will be the same in 2027, India will have risen up the list to place fifth with $46 billion under management.
- The countries that will have the biggest percentage increase in robo-advisor FUM over the next five years are Ukraine (957%), Sudan (720%), Benin (578%), Niger (500%), Turkmenistan (500%), Pakistan (499%), Cameroon (495%), Burkina Faso (442%), Togo (440%) and New Zealand (409%).
- The countries that will have the biggest dollar value increase in robo-advisor FUM over the next five years are the United States (+$1,029bn), China (+$63bn), the UK (+$34bn), India (+$30bn), Japan (+$29bn), Argentina (+$22bn), Ukraine (+$20bn), Sudan (+$20bn), Canada (+$17bn) and Australia (+$17bn).
