The Emergence of
the Robo-Advisor
The Growing Trend of
Automating Asset Allocation
Strategies

It all started with a game
❖ kaChing is was a popular
virtual investing game on
Facebook

and a Stanford professor
❖ Andy Rachleff, founder of
Benchmark Capital, takes up
management of kaChing

Funny story
circa 2009
@#$%^!!!

Fast forward to 2014
And now…
Wealthfront is the largest robo-advisor in
the world and manages over $1.5 billion

So, what is a robo-advisor?

“Robo-advisors are a class of financial advisor that
provides portfolio management online with
minimal human intervention.”
–Wikipedia

Robo-advisors going after plain-vanilla, asset allocation
❖ Robb-Advisors going after the
low-end of brokerage/RIA
business with automated asset
allocation
❖ $? < 25 bps

Who are the players?

Asset Managers

Portfolio Apps

Algorithmic Portfolio Management
❖ Platforms like Collective2 and
Covestor allow investors to
synch their brokerage accounts
to an automated trading
strategy

What’s driving robo growth?

The incumbents are
coming
Schwab, Vanguard, et al following with
their own offerings

Any questions?