We had the pleasure of sitting down with Varun Sridhar, CEO of Paytm Money, India’s largest online investment and wealth management platform. Varun is an expert in leading financial institutions to digital transformation through intrapreneurship. Prior to Paytm Money, he served as CEO of FinShell India, where he helped launch PaySa, a mobile fintech platform. He was also with BNP Paribas and Deutsche Bank prior to that. 

The interview below has been summarized from an interview we had with Varun in our podcast, WealthTech Unwrapped

Ned (N): How are you doing, Varun? Thank you for joining us. 

Varun (V): Very good, thank you. Super excited to be here. And, you know, I’ve heard of you guys before so I’m very excited that I can add something. It’s a good day today, however, we’re going through some tough times in India. It’s been a challenging few weeks for everyone. But yeah, but I’m happy and safe personally.

N: Happy to hear you’re doing well. There’s a lot we want to cover, so let’s get started. I wonder, how does a corporate guy end up in one of the coolest jobs in FinTech? You’ve been at Deutsche Bank, BNP Paribas, big corporates. Was fintech something you always wanted to do or was it more happenstance that you ended up at Paytm Money?

V: So I think I’ll take a step back and maybe wind my life. I never imagined that I would be in a FinTech. If I go all the way back, I just wanted to be in a bank. I actually bought my first stock at 16. 

You know the reason I wanted to be a banker because my uncle invited me to a five-star hotel in Delhi, and said, “spend as much as you want today, and I’ll take care of the bill.” When a 16-year-old gets an opportunity like that, you think “hey, I want to make a lot of money too”. After graduating in commerce, I was chartered in accountancy and then somehow went into politics. 

As the world has evolved, so has our understanding of how financial strategies can help people achieve their goals. Budgeting, investment and responsible borrowing are just some of the strategies we use to grow wealth, and it seems more accessible than ever as digital innovation surges. 

Why, then, are we seeing a widening in the financial advice gap across the globe?

What is the financial advice gap?

Financial advice is any kind of help with the planning of individual life circumstances; preparing for retirement, saving for a rainy day, tax planning, and perhaps the most important of all – how to invest in order to grow wealth.

The ‘advice gap’ then refers to the disparity between people who have access to this financial aid and to those who either can’t afford or access financial advice. 

A survey by OpenMoney UK shows a sharp increase in this gap every year. More people are finding financial advice unaffordable and even more are unaware of available financial advice:

  • The “free advice” gap refers to those who could benefit from advice but are unaware it exists – is estimated to have risen to 20.8 million.
  • The “affordable advice” gap which refers to those who could benefit from advice but can’t afford it – is estimated at 5.3 million.

Financial illiteracy is a huge issue

It’s clear that too many adults aren’t making financially-sound plans or investing for their future.

OpenMoney (2020) reveals that about 44% of adults had run out of money before their next pay at least once in the past year and only 24% of adults save every time they get paid. Whether exacerbated by the COVID-19 disaster or not, it’s abundantly clear that many lack the financial knowledge and capacity to weather another economic crisis.

And it’s not as if financial services are unavailable to the public – numerous financial advisors exist, which can generally be categorised into the following:

  1. Fee-based and commercial-based advisors: individuals or groups typically referred to as “financial planners” who take a fee for financial guidance and management.
  2. Robo Advisors: digital wealth management platforms that automate the process of investing and managing money on your behalf – powered by algorithms, with little to no human supervision.

So why does the financial gap still exist?

When asked about seeking financial advice, many adults revealed that they: 

  • Were simply unaware
  • Many didn’t know of existing financial advisors or where to look.

  • Think it is unaffordable 
  • A recurring consensus was that many financial services were exclusive to the wealthy or simply too expensive.

  • Believe it’s unnecessary
  • They trust their ability to manage their own money and believe they “shouldn’t have to pay for something they can google”. 

  • Distrust conventional advisors
  • Possibly the biggest reason – many believe financial advisors are untrustworthy and only wish to “sell you something” out of self-interest. 

    Digital wealth managers may be the answer

    Robo-advisors are digital, algorithm-driven financial advisors that can help provide adequate, affordable and unbiased financial planning to solve many of issues driving the advice gap:

    • Inexpensive

    The selling point of most robo-advisors is that they require low starting capital (some from as low as $100) and minimums which makes financial advice more accessible and affordable to the general public.

    • Advice is automated

    Based on your risk-appetite, robo-advisors assess your information through a survey to offer advice and tailor a suitable portfolio which automatically invests your money digitally. This means little to no human intervention, removing the element of distrust people may have in conventional advisors.

    • Can be recommended by conventional financial advisors 

    By incorporating both a hands-on approach with robo advisory, financial advisors can offer an even more comprehensive, accessible and personalised financial plan for clients; this could help onboard clients who may previously not have the means for financial services. 

    The potential for Robo-advisors to start closing the financial advice gap isn’t just promising for budding investors. Financial advisors can use this strategy to bring affordable, diversified investing and essential financial advice to an untapped market, creating new opportunities that were previously too expensive and time-consuming to pursue. These opportunities aren’t necessarily short-term, either: financial advisors can reach first-time investors and potentially turn them into long-term clients, capitalising on the scalability of robo-advisors.

    Franklin Templeton, Apex Clearing and Bambu Introduce Tango – A Scalable Goals-Based Wealth Management Tool for Advisors

    New offering brings together three powerful technologies for a personalized, end-to-end solution

    San Mateo, CA, December 10, 2020 – Franklin Templeton today announced the introduction of Tango, a turnkey robo-advisor designed to empower advisors to provide personalized, goals-based wealth management at scale. The all-in-one solution is a collaboration between three industry leaders—Franklin Templeton, Bambu, and Apex Clearing. Franklin Templeton provides the personalized, goals-based portfolio management advice to advisors through its proprietary Goals Optimization Engine (GOE™). Bambu’s white-label platform is the digital solution for clients and advisors, while Apex facilitates trading and custody through its modern back-end platform built for safety, scale and speed.


    “Tango is a single solution built on the expertise of three partners, each providing a unique offering for advisors, and it is truly a case of the whole being greater than the sum of its parts,” said Harshendu Bindal, director of Digital Strategy and Wealth Management for Franklin Templeton. “As the industry continues to move towards digital platforms and technology-based services, investors increasingly expect a seamless digital experience. Tango will give advisors the ability to focus on growing their client relationships with professional management, personalized to their client’s specific goals, without the demands of increased back-office responsibilities or up front charges that are typical of many robo platforms.”


    GOE, a key differentiator in the offering, is Franklin Templeton’s proprietary technology that enables advisors and financial services firms to deliver personalized, high-value services to end-investors at greater scale. Based on proprietary research that won the prestigious Harry Markowitz Award in 2018[i], GOE combines Franklin Templeton Investment Solutions’ portfolio construction expertise with dynamic programming to deliver individualized portfolio pathways based upon an individual’s unique goals. With the ability to handle multiple investor goals, GOE uses probability of success as the driver for the initial asset allocation and each reallocation in order to maximize likelihood of achieving the goal. Portfolio paths further adapt to client changes and market events.


    Apex was one of the first companies to digitize the activities associated with securities clearing and custody to give financial services providers the speed, efficiency and flexibility they need to deliver a better investment experience. Bambu has integrated with Apex’s robust suite of application programming interfaces (APIs) that include new account opening, automated customer account transfer systems (ACAT), funding and trading.


    “From our headquarters in Singapore, we have delivered digital wealth solutions for the most discerning global and US clients. With Tango, we saw an opportunity for a singular offering that makes it much simpler for anyone in wealth management to launch their own white-label robo-advisor. Through a single, bundled relationship, Franklin Templeton, Apex and Bambu have created a turnkey techstack combining proven technology, clearing services and professionally constructed portfolios,” said Ned Phillips, CEO and founder of Bambu.


    “Apex is committed to simplifying investing by leveraging technology to bring relevant and cost-effective investment solutions to individuals and the advisors that serve them. Through this exciting new relationship with Franklin Templeton and Bambu, we’re able to do just that,” said Tricia Rothschild, president of Apex Clearing. “Tango is a powerful solution that brings together a frictionless digital experience with open-architecture technology designed to arm advisors and financial services firms with sophisticated goals-based decision-making capabilities that will improve investors’ relationships with money.”


    Tango is designed for seamless implementation and cost efficiencies that can be deployed quickly and easily into an advisor’s practice. Firms can implement this solution without upfront technology costs in a matter of eight to ten weeks versus several months through competing solutions.


    Franklin Templeton continues to expand its offerings beyond traditional investment products, which now include planning and advice, digital tools, and advisor and retirement platforms. Tango leverages these expanded offerings to weave active investing strategies and advice into a digital platform, enabling financial planners to efficiently run their businesses with custom, optimized portfolios in an open-architecture environment.


    About Bambu

    Bambu is a leading global digital wealth technology provider for financial institutions. We enable companies to make saving and investing simple and intelligent for their clients. The cloud-based platform is powered by our proprietary algorithms and machine learning tools. The company serves approximately 300,000 end users on the platform in 10 countries. Bambu is funded by PEAK6 Investments and Franklin Templeton. Founded in 2016, Bambu is headquartered in Singapore with a subsidiary in the United Kingdom, and United States and EMEA representatives. For more information, visit https://bambu.co/ and follow us on LinkedIn and Twitter.


    About Apex

    Apex Clearing is a custody and clearing engine that’s powering the future of digital wealth management. Our proprietary enterprise-grade technology delivers speed, efficiency, and flexibility to firms ranging from innovative start-ups to blue-chip brands focused on transformation to capture a new generation of investors. We help our clients provide the seamless digital experiences today’s consumers expect with the throughput and scalability needed by fast-growing, high-volume financial services businesses. Founded in 2012, Apex Clearing, a PEAK6 company, is registered with the SEC, a member of FINRA and a participant in SIPC. For more information, visit the Apex Clearing website, and follow the company on Facebook, LinkedIn, and Twitter.


    About Franklin Templeton

    Franklin Resources, Inc. [NYSE:BEN], is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 165 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company brings extensive capabilities in equity, fixed income, multi-asset solutions and alternatives. With offices in more than 30 countries and approximately 1,300 investment professionals, the California-based company has over 70 years of investment experience and approximately $1.4 trillion in assets under management as of November 30, 2020. For more information, please visit franklintempleton.com and follow us on LinkedIn, Twitter and Facebook.



    # # #


    Copyright © 2020. Franklin Templeton. All rights reserved.

    [i] The Harry M. Markowitz Award from the Journal of Investment Management and New Frontier Advisors, LLC is an annual award honoring Dr. Harry M. Markowitz, a Nobel laureate in economics, for his legacy and to support future research and innovation in practical asset management. Candidates are taken from among papers published in the Journal of Investment Management each year.


    2020 Year in Review

    It’s hard to believe that the year has flown by so quickly that we are a couple of weeks away from welcoming 2021. To wish 2020 farewell, we’re recapping our top 10 most memorable milestones. Here’s a look back at 2020.

    New projects: 9 

    Employees: 70+ globally

    Sales: Doubled in 2020

    New markets: Africa, Saudi Arabia, and the USA

    Total countries using Bambu technology: 10


    #10 Introduction of new corporate logo, new domain, and upgraded website

    Welcome Bambu 2.0. The rebrand has provided an opportunity to improve and evolve our service offerings. We aim to be the world’s leading wealthtech company. The firm is also expanding its services geographically with new clients in America, Africa, and the Middle East

    #09 Nominated and Awarded on an international scale  

    We’re fortunate to have been recognized internationally for several awards and nominations. Some examples include:


    #08 New Clients, New Regions

    At the beginning of the year, we started with 3 new projects in the works. Eleven months later, we can proudly say that we’re ending the year with 7 additional projects. 2021 is looking like it will be our busiest year yet.  We now have clients in almost every continent.


    #07 Highway to a 100 Unicorns Program

    We were selected for Microsoft’s Highway to a 100 Unicorns Initiative, which discovers high potential technology startups across APAC. We were one of the 79 startups worldwide to globally receive access to enterprise clients through Microsoft’s unique co-sell program, world-class mentors, and funding. An exciting opportunity for the company!


    #06 Beanstox Launch – a custom-built Bambu GO platform in the USA

    Designed and launched Beanstox, a Robo-advisor platform targeted at US retail investors and owned by Shark Tank investor Kevin O’Leary. The simple designed platform caters to individuals, mostly the young, who have not invested before. Read more


    #05 WealthTech Unwrapped Podcast

    We are always finding ways to be different and provide insights into the Fintech industry. So we decided to launch our very own Podcast featuring our CEO and Founder Ned Phillips, anchored by Daniela Galarza. It weaves the narrative between a startup founder, Ned, a newbie to the fintech, Daniela, and special guests, bringing their unique insight into this growing industry.

    Guests who have appeared on WealthTech Unwrapped so far include:

    • Debbie Watkins, Founder and CEO of Lucy
    • Tricia Rothschild, President of Apex Clearing
    • Paolo Sironi, Fintech expert from IBM Industry Academy
    • Geoff Leeming, Cybersecurity Expert 
    • Rich Turrin, an Innovator and author of ‘Innovation Lab Excellence.’ 
    • Edmund Lowell, Serial entrepreneur and Founder of KYC Chain
    • April Rudin, Wealth Marketing Expert
    • Kiaan Ebrahim, Child Investor
    • Walter de Oude, Founder and Owner of SingLife
    • Olivier Berthier, Founder and CEO of MoneyThor

    Check it out on Apple Podcasts, Spotify, or wherever you get your podcasts!


    #04 Finalist at MAS Fintech Hackcelerator Program

    Our product, Sustainability Insights, was selected as a top 10 Finalist for the Monetary Authority of Singapore (MAS)’s Global Fintech Hackcelerator! The competition received over 430 applications across more than 40 countries. We were also the only #roboadvisory company to be in the category. Great job to the team for putting in the incredible effort! Read more.


    #03 Partnership with Apex Clearing

    Apex Clearing, the custody and clearing engine powering the future of wealth management, is now fully integrated with Bambu – a move that will further revolutionize digital investing for consumers. This new integration with Apex further propels us forward in the U.S. and strengthens our position as one of the leading global wealth tech companies. Read more.


    #02 Launched a Robo for BCA – Indonesia’s largest bank

    PT Bank Central Asia Tbk, commonly known as BCA, is one of the largest Indonesian private banks founded in 1957. BCA offers both commercial and personal banking services through its 1000-plus branches across Indonesia. Bambu developed an end-to-end Robo advisory B2B2C solution that focuses on the customer’s journey in creating financial goals. The platform includes Goal-based Investment, Client Risk Assessment, Investment Projection, Portfolio Rebalancing, which is integrated with BCA’s CRM with a custom admin dashboard, and Portfolio Performance. The primary users are the Relationship Manager of BCA’s High Net-Worth Clientele


    #01 Franklin Templeton, Apex Clearing, and Bambu Introduce Tango – A Scalable Goals-Based Wealth Management Tool for Advisors

    The all-in-one solution is a collaboration between three industry leaders—Franklin Templeton, Bambu, and Apex Clearing. Franklin Templeton provides personalized, goals-based portfolio management advice to advisors through its proprietary Goals Optimization Engine (GOE™), while Apex provides the digital clearing experience. At the same time, Bambu provides the technology to bring it all together. Through a single, bundled relationship, Franklin Templeton, Apex, and Bambu have created a turnkey tech-stack combining proven technology, clearing services, and professionally constructed portfolios. Read more

    Check out our year in review podcast episode.  


    On November 26th, the Monetary Authority of Singapore (MAS) announced the 20 finalists for the 2020 Global FinTech Hackcelerator (GFTH). 

    This year, finalists presented their unique solutions to MAS in response to the challenges posed by COVID-19 and climate change. The GFTH aimed to drive positive social and environmental impact within the financial sector. Judges identified innovative market-ready solutions that could address real industry needs. 

    We are proud to announce that Bambu has emerged as one of the 10 finalists, beating over 270 submissions in Singapore, and as one of 20 companies from across more than 40 countries. Bambu is also the only company within the robo-advisor category.

    The finalists will be pitching their solutions at the Global FinTech Hackcelerator Demo Day at the 2020 Singapore FinTech Festival x Singapore Week of Innovation and Technology (SFF x SWITCH). The event will be happening at Singapore FinTech Festival, from 7 – 11 December. Join us there if you can!


    What did Bambu submit for GFTH? 

    Bambu has developed a Multi-Asset Machine Learning (ML) product that enables Financial Institutions to integrate material ESG considerations into the investment decision-making process, holistically and solves the pressing industry challenges.

    The product is named ‘Sustainability Insights’ and targets banks, asset managers, and Principles for Responsible (PRI) signatories who hope to move towards Green Finance. 

    Residing in Amazon Web Services (AWS) cloud, Sustainability Insights adopts the UN Sustainable Development Goals framework into the analysis of investment products. It provides scoring, controls carbon risk, captures mandate deviation using Natural Language Processing (NLP), and helps institutions transition their investment portfolios into the low carbon economy. 

    With ESG Analytics driven by explainable artificial intelligence (AI) architecture, it further enables institutions to choose ESG data points based on their consideration and infuse their own convictions as an overlay into the research process with complete transparency.


    About the Monetary Authority of Singapore (MAS)

    The Monetary Authority of Singapore (MAS) is Singapore’s central bank and integrated financial regulator. 

    As a central bank, MAS seeks to promote sustained, non-inflationary economic growth for Singapore through monetary policy and close macroeconomic surveillance and analysis. 

    MAS manages Singapore’s exchange rate, official foreign reserves, and liquidity in the banking sector. 

    As an integrated financial supervisor, MAS fosters a sound financial services sector through its prudential oversight of all financial institutions in Singapore – banks, insurers, capital market intermediaries, financial advisors, and stock exchanges. 

    It is also responsible for well-functioning financial markets, sound conduct, and investor education. 

    MAS also works with the financial industry to promote Singapore as a dynamic international financial center. It facilitates the development of infrastructure, technology adoption, and upgrading of skills in the financial sector.


    About the Singapore FinTech Festival

    Singapore FinTech Festival (SFF) is the world’s largest FinTech event. 

    It also acts as a global platform for the FinTech community, linking FinTech players, technopreneurs, policymakers, financial industry leaders, and investors (e.g., private equity players and venture capitalists, and academics) together. 

    Organised by the Monetary Authority of Singapore (MAS) in partnership with The Association of Banks in Singapore and in collaboration with SingEx Holdings, you can find out more about SFF at www.fintechfestival.sg 


    About SWITCH

    The Singapore Week of Innovation & Technology (SWITCH) is the leading tech festival for the Global-Asia innovation ecosystem. 

    It is a one-stop platform where innovation meets enterprise, with access to global startups, investors, corporates, innovation community, and ecosystem players. 

    It focuses on these key industries – Health & Biomedical Sciences, Smart Cities & Urban Solutions, and Trade & Connectivity.

    SWITCH is a week-long event featuring Exhibitions, Conferences, Workshops, Lab Crawls, and partner activities such as startups pitching competition, SLINGSHOT 2020, and open innovation platform, TechInnovation. 

    Together with the Singapore FinTech Festival (SFF), the SFF x SWITCH event in 2019 convened over 60,000 participants from 140 countries, hosted 569 speakers and 1,000 exhibitors.




    Defying Expectations

    Robo-advisors global AUM is expected to reach the US$1 trillion mark in 2020 and quadruple to US$ 4.6 trillion by 2022. 

    The rise of Robo-advisory is evident. Now more than ever, it is critical for wealth managers to grasp the opportunity or face getting left behind. 

    But of course, it is only natural for us humans to be a little hesitant about automation. Contrary to the general assumption, technology solutions like Robo-advisors bring about a win-win scenario for wealth managers and clients. 

    The Shift has Started 

    Robo-advisors are perfectly aligned with the needs-based investment trend. It is a fact that more and more investors are moving towards this approach, and Robo-advisors are perfectly positioned to capture this wave. 

    Treating customers fairly is something we’d expect businesses to practice. Unfortunately, a survey conducted on clients would prove otherwise. 

    Gallup asked respondents to rate people’s honesty and ethical standards in a range of fields on a percentage from low to high. The average ratio for those in the financial sector was only 28%. Edelman also conducted similar research called “Global Trust Barometer Survey,” the results showed that financial advisory is the least trusted by clients (Figure 1).

    Figure 1: Low Trust in Segments of the Financial Services Industry

    (Source: Edelman)

    Although customer protection has been around for a long time, firms still did not fully embrace it as a strategic tool to reduce poor customer treatment. Eventually, it tainted the perceptions and trust that customers have in financial institutions.

    That is why government bodies and regulators worldwide are implementing policies like the ‘Treating Customers Fairly (TCF)‘ initiative, ensuring that firms consider the interests of customers and treat them fairly. In turn, it should build the customer’s confidence in financial institutions. 

    Robo-advisors are designed to support these initiatives further. The client’s needs are considered for all investment decisions to ensure that it is the best option available. Not only that, but all recommendations are free from any merits-based motives. 

    Whether it is today, tomorrow, or years down the road, wealth managers will have to integrate digital wealth solutions into their offerings. The Shift has already begun and it’ll only be a matter of time before the market becomes concentrated with competitors. 


    Win-Win Scenario for Wealth Managers

    Integrating Robo-advisory into their offerings can bring out many benefits, namely: scaling up and utilizing analytics. This is even more critical in the current world, where wealth managers are swarmed with pressures from all directions. 


    Expanding the Market 

    With Robo-advisors, wealth managers can reach more clients at a manageable cost by digitalizing their value chain. Younger generations and lower net worth individuals were unable to receive financial advice due to their asset limitations. With the low fees and ease of use, the world of financial advisory has been opened to them.

    Although this group of customers may not generate the desired ROI like HNWIs, it is more about customer acquisition early in their wealth journey. Wealth managers will then nurture the relationship and guide these Millennials up the wealth ladder to be the HNWIs of the future. It is all about giving up short-term gains for long-term profitability.



    Recently, there’s been a phrase circulating saying that “data is the new oil,” and it just might be. The ability to turn customer data into actionable insights might give any financial firm the advantage it needs to compete in the competitive market. 

    The application of advanced analytics is providing value to financial institutions worldwide. With data, managers can make quick and reliable decisions to serve their clients better. 

    Figure 2: Analytics is Key Factor in Decision-making

    (Source: Deloitte)


    There is a wide range of ways in which data can be utilized. A majority of firms have incorporated analytics for operational efficiency. At the same time, others are using data towards more data-driven processes such as sales and marketing. In both cases, it has shown that better investment decisions (Figure 2) were made and an increase in productivity in the middle and back office. 

    But how does that work with Robo-advisor? 

    Robo-advisors are smart. Based on the client’s questionnaire, they analyze the data and recommend investment solutions according to the client’s needs and goals.

    Compared to humans, Robos can analyze thousands of variables simultaneously and efficiently. Some variables that are considered include demographics, timing, historical trends, technical analysis, fundamental analysis, market sentiment, and more. 

    Now it is not to say that human advisors no longer have to analyze data. They still do. With the data collated by Robos, wealth managers are in a position to understand their client better – What’s their lifestyle; Where’s the trend heading towards; What are their needs and goals? 

    They can then strategize and find ways to curate investment decisions, risk management, and improve their advisor-client relationship. 

    Figure 3: Does Analytics Improve Competitive Positioning?

    (Source: Deloitte)


    Data and analytics can determine a firm’s position in the market. It is known to improve a firm’s competitiveness if it is properly harnessed and utilized. According to a survey conducted by Deloitte (Figure 3), 55% of respondents said analytics had improved their competitive positioning. 

    Seeing the power of analytics, 86% of wealth management firms surveyed have increased their data and analytics spending over the past three years. 


    Win-Win Scenario for Customers

    The clients mainly benefit from these three features: high-quality portfolios, ease of use, and low fees. 


    High-Quality Portfolios 

    Before Robo-advisors, personalized portfolios were an exclusive offering only available to the HNWIs and UHNWIs of the world. But now, it is available to everyone of any income background. 

    At the core of these portfolios are low-cost index funds such as exchange-traded funds (ETFs). Almost five years after the introduction of Robo-advisors, nearly 100% of their AuM consists of ETFs. These low-cost index funds give investors an 80% – 90% chance of outperforming other investment types. Why? 

    Robo-advisory is not about timing the market; it’s about time in the market. They are utilizing Nobel Prize-Winning investment models to determine the best investment strategies for clients. It is all about creating an investment portfolio with the best returns and lowest risks, suitable for all clients, no matter where they are on their wealth journey. 


    Ease of Use 

    Appealing to the client’s digital preference, the whole investment process is easily accessible through a digital interface- mobile applications and websites. Everything from opening an account to determining the investment strategy is fully automated. 

    Robo-advisors will do all the work so investors can focus on what matters to them, whether that is a passion, job, or spending time with loved ones.


    Low Fees 

    And last but not least, the prominent selling point of Robo-advisor is the low fees as compared to traditional advisors who charge 2% – 3% of AuM for the management fee. It was a once in a blue moon opportunity if anyone could receive professional advice for less than 1%. But now, that is the norm.

    Make the win-win scenario a reality for both you and your customers. 

    At Bambu, we specialize in developing Robo-advisory solutions for the financial services industry, from smaller RIAs and wealth advisors to some of the world’s largest banks. We help our clients work through the above vital considerations to implement solutions that genuinely benefit their wealth management business. 

    To find out more, check out our product here or contact us at sales@bambu.co for more information.

    Evolution of Robo-advisors

    Today, the average person touches their phone an astronomical 2,617 times per day. That works out to be an average of 3 hours 10 minutes per day and just over 1,000 hours on our mobile phones a year! It’s no surprise that the past decade has been labeled as the ‘digital era.’

    As part of the digital revolution, wealth tech too has experienced its growth spurt. Introduced 12 years ago, Robo-advisors have evolved from a tool to a smart, intuitive financial advisor capable of servicing clients of all levels on the wealth spectrum. 

    Source: Deloitte


    Robo-advisor 1.0

    The first Robo-advisor was brought to life in the aftermath of a financial crisis. It was the first of its kind, paving the way for automated advisory services. 

    Robo-advisors first-generation was developed to create a transparent and reliable investment advisory process based on objectivity- data rather than human instincts. As a result, it produced detailed, multi-format, and secure transactions, reducing clients’ pressure and regulators on the financial institutions.

    To some degree, Robo-advisor 1.0 was just an augmentation of traditional advisory practices already in place. It was mainly a solution to help streamline tasks that were previously performed by financial advisors. 

    The result? Increasing operational efficiency while lowering costs to improve return on investments for clients. 

    However, this wasn’t enough. Like any new product, there was a lot of room for improvement. Even though there was a wide array of products to choose from – stocks, bonds, ETFs, and other investment vehicles – it still did not meet investors’ basic requirements. 

    Investors, especially HNWI and UHNWIs, were looking for services that provide financial coaching, goal-based planning, and proactive adjustments, but Robo-advisor did not yet possess such capabilities. Hence, this new advisory service did not appeal to them and was not an option for consideration above the mass affluent. 

    Robo-advisor 2.0

    The upgrade from Robo-advisor 1.0. 

    Considering feedback and demands from clients, the Robo-advisor evolved into its next-generation – setting up accounts and order execution can be quickly completed through the platform. 

    Questionnaires are used to filter product recommendations; they can now allocate clients to pre-determined portfolios based on their risk profile. A dedicated advisor manages the assets allocation process. And once invested, the rebalancing and management of portfolios are performed by financial advisors. 

    This whole investment process is still semi-automatic as investment managers are overseeing the algorithms and making changes accordingly. 

    Nonetheless, it was an evolution of Robo 1.0, where the platform was able to integrate cognitive computing programs that interacted with clients directly, significantly lessening a human advisor’s workload. 

    Overall, it is a more personalized and scalable digital wealth management solution. 

    Robo-advisor 3.0

    Here comes the next generation, where a majority of the current Robo-advisors are at. 

    The onboarding process is pretty much the same as in past generations. But the major differentiator comes down to the platform’s investment recommendations and portfolio management. 

    Algorithms help determine each client’s best investment decisions – a fully personalized experience based on their financial goals. Not only that, but there is little need to manage portfolios as the algorithms will ensure that clients’ goals are on the right track through automated rebalancing.

    For clients who still want the human touch, don’t fear; it is still available. 

    Some firms still offer consultation with their human advisors as an additional service to the Robos. No matter the circumstances, professionals are readily available, whether for consultation or providing the final oversight of the investment progress.  

    Robo-advisor 3.0 is a fully automated service that covers low to high-value capabilities. 


    Robo-advisor 4.0

    Robo-advisor 4.0, the new and improved high tech advisor, delivers a more engaging and personalized experience for investors and advisors.

    In the onboarding process, questionnaires are more sophisticated to better profile and gauge the client’s risk. Machine learning can be deployed at this juncture to improve on the goal recommendations for the user.

    Proceeding onto the next step of the investment process, it is fully automated – from investment strategies to portfolios’ monitoring. Portfolios are built based on algorithms and risk bands to construct investment classes tailored to your needs. This also means that it can shift different asset classes based on market conditions and significant life changes as per your objectives and goals.

    It doesn’t end there; there’s more. 

    The interactive experience is far more advanced than any of its predecessors. Design thinking methodologies are applied to ensure the platform is designed to meet every individual user’s requirements. 

    From curated questionnaires, according to demographics to recommendations based on your current income and expenses, the modern Robo-advisor is now able to understand the client’s intentions and is capable of delivering a human-like advisory experience.

    Where is it Heading?

    The Robo-advisory industry started just 12 years ago, yet it has evolved rapidly, and it’s not stopping for anyone here. As the astronomical usage of technologies continues to surge, Robo-advisors too will continue to push the ceiling of digital wealth higher. 

    Source: Capgemini


    Currently, the Robo-advisory industry is still in the innovation stage, with much room for improvements. Additionally, the automated advisory market share is still a small slice of the pie compared to the traditional advice model performed by human advisors – this represents a massive opportunity for wealth tech galore.


    A word of caution though, 92.4% of clients survey said they are not satisfied with the current state of digital wealth management, citing examples such as: 

    1. “Robots cannot understand my questions and often give irrelevant answers.”
    2. “There are too few questions that I can ask, leaving meaningful communication out of reach.”
    3. “Robots are only capable of answering basic questions.”
    4. “It is emotionless and cold.”


    To integrate Robo-advisors into one’s service offerings will indeed help expand the clientele base and delivery efficiency. But leveraging technology does not mean eliminating the need for humans; it should be used on a complimentary basis next to the human touch’s warmth. 


    The foundations for Robo-advisors have been set in place, and the trajectory is only going up from here. It is an opportunity for RIAs, wealth managers, and brokers to compete with the industry’s incumbent with the same advantage. 


    At Bambu, we specialize in developing Robo-advisory solutions for the financial services industry, from smaller RIAs and wealth advisors to some of the world’s largest banks. We help our clients work through the above vital considerations to implement solutions that genuinely benefit their wealth management business. 


    To find out more, check out our product here or contact us at sales@bambu.co for more information.