Over the past few years, a new form of advice has emerged with a new breed of wealth management firm starting to gather retail assets away from incumbent players. These firms leverage client information and algorithms to develop automated portfolio allocation and investment recommendations tailored to the individual clients. They have been coined the term “robo-advisors,”.
While this new service has been in the U.S, for a few years now, in Canada, it is still relatively new. All investors should be aware of this new and growing trend in investing.
Future business activity will reflect two economic realities: 1) the over-indebted state of the U.S. economy and the world; and 2) the inability of the Federal Reserve to initiate policies to promote growth in this environment.
The first reality has been widely acknowledged, as developed and developing countries both have debt-to-GDP ratios sufficiently large to argue for a slowing growth outlook (Chart 1).