Portfolio replication

21 March 2017 By Robyn Mak Follow @mak_robyn

The U.S. investment bank is the latest established player to build an automated private banking tool for clients. Standalone robo-advisory services are already struggling with lousy margins. Now, as more incumbents fight back, their best option may be to sell.

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Goldman Sachs is building an automated digital advice platform geared to mass affluent customers, according to a job listing posted on the bank's website.

The so-called robo-advisory platform would sit within the bank's rapidly growing investment management division, according to the ad. That division, which Goldman has been trying to grow in recent years to diversify its revenue, posted a record $1.38 trillion in assets under supervision at the end of 2016.

Separately, U.S. brokerage Charles Schwab on March 14 launched a service that combines its automated investment management technology with human advisers. The service, called Schwab Intelligent Advisory, provides clients with a financial and investment plan, unlimited access to a human adviser via phone or video conference, and an investment portfolio of exchange-traded funds managed by computer algorithms.

Clients need to invest at least $25,000 on the Schwab platform and pay an annual advisory fee of 0.28 percent of assets, with a quarterly maximum of $900, the company said.

A report from Morgan Stanley forecasts the robo-advice market to top $6.5 trillion in assets under management by 2025.

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