PFM; Account Aggregation

Robo Advisors

New Competitors

Key Finding from the SYNERGISTICS Report:

Results reveal current usage of Robo advisors is reported by just a narrow slice of consumers, with usage slightly higher among younger consumers.

A87 Prop Graphic

Highlights of the Study

This study examines consumer reaction to a variety of online financial management services including PFM, online tools, account aggregation, and robo advisors.  The threat of new competitors in the market is also assessed.

National Internet Survey – 992 consumers age 18 or older.

Key Dates


August 2016 – Project Report available.

Strategic Questions

  • How do consumers assess their financial situation – encompassing aspects such as analyzing expenses, tracking assets and liabilities, and measuring investment performance?  What methods are used – including software, personal financial management sites, provider websites, or other applications?
  • What types of online financial planning tools are used or seen as valuable by consumers – including bill or payment alerts, investment planning, loan calculators, budget planners, retirement planning, and tax planning?
  • How widely has account aggregation been adopted?  Is there an opportunity for further adoption? What benefits and drawbacks do consumers see in account aggregation?
  • Is account aggregation a tool for strengthening main provider relationships – or is there a threat from third parties?  What types of providers are currently used by consumers for this service?  Does having a longstanding relationship give a provider a competitive advantage in this market?
  • What is the current level of familiarity and experience with robo advisors?  Are users placing significant portions of their assets with these organizations?  Are they satisfied with the investment returns they are receiving?
  • How wide is the potential for expanded adoption of robo advisors?  Does an option for human contact broaden the appeal?  What are the perceived advantages and disadvantages of this service?
  • What is the profile of current users of online planning tools, account aggregation, and robo advisors in terms of demographic and behavioral variables?  Are potential adopters similar or different?

Research Issues

  • Online financial management and advisory services comprise an exciting area of innovation in financial services. The ongoing development of services, applications, and access channels makes this area something of a moving target. Personal financial management (PFM) encompasses an array of online money management, tracking, information, and planning tools.  Many parties – depository institutions, investment providers, financial planners, and third-party providers – have become heavily involved in PFM in recent years.  At their most advanced, some PFM services utilize account aggregation to import data from multiple providers and offer analytical capabilities to provide a total view of a consumer’s financial position.  Ideally, these tools, in conjunction with online banking and bill payment, may add “stickiness” to a relationship.
  • A more recent, and potentially disruptive, development is that of automated or robo investing services. These services utilize computer models or algorithms to recommend investment allocations and choices based on factors such as a customer’s investment goals, risk tolerance, and time horizon.  Some even make actual investment transactions and reallocate balances on an ongoing, automated basis.  Both traditional and non-traditional players are active in this area.
  • As online financial management and advisory services evolve, it may become essential for providers to incorporate these options into their customer relationship strategies.  It is very important to understand the customer perspective in terms of the degree of information, advice and recommendations, and transaction capability desired from such services. [A87]