“For investment managers looking to cost-effectively develop their own distribution channels without disrupting existing relationships, robo-advisors offer a great option”, according to Andrew Haslip, head of financial services content for Asia Pacific at GlobalData.
GlobalData suggested that it expects international asset managers to build similar distribution channels to that of the Nomura and 8 Securities partnership.
Nomura Asset Management recently acquired the majority stake in Tokyo-based robo-advisory services provider and a minority stake in Hong Kong headquartered parent company 8 Limited for $25 million.
GlobalData explained that this move sets a precedent for international asset managers to build distribution channels via the purchase of other robo-advice financial technologies.
Chloe, 8 Securities’ robo-advice platform, was the first in Asia to be offered via a mobile app, which currently has a presence in Hong Kong and Japan.
According to GlobalData, the investment from Nomura reflects the promising growth and potential of robo-advisory services in Asia, and marks one of the continent's largest fintech capital injections this year.
In addition, as per the company’s 2017 Mass Affluent Investors Survey, only 1 percent of investors said they used robo-advisors as their main investment channel, compared to 27 percent of millennial investors who said they had used one.
GlobalData stated that with millennials fast becoming the economically dominant age in many key markets, reaching out to them effectively has risen in investment managers’ priorities.
Haslip concluded: “[Robo advisors] can draw in new, younger clients that want purely digital solutions. Other large-scale asset managers will need to make similar investments in proven robo-advisors if they want to compete for the next generation of investors.”
He added: “By buying into a proven platform that works in Asia, Nomura is explicitly targeting millennial investors, as the investment gives the company a digital distribution channel to reach out to this demographic.”
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