Sample Solution

Mechanism of Robo Advisors;
The tools they employ to manage client portfolios differ little from the portfolio management software already widely used in the profession. The main difference is in distribution channel. Until recently, portfolio management was almost exclusively conducted through human advisors and sold in a bundle with other services. Now, consumers can access the portfolio management tools directly, in the same way that they have obtained access to brokerage houses like Charles Schwab and stock trading services with the advent of the Internet. Roboadvisors are extending into new business avenues.
The customer acquisition costs and time constraints faced by traditional human advisors have left many middle-class investors who are underadvised to get a better advice to invest in the portfolio with help of the robo advisors easily. The average financial planner has a minimum investment amount of $50,000,while minimum investment amounts for robo-advisors start as low as $500 in the United States and as low as £1 in the United Kingdom. In addition to having lower minimums on investable assets compared to traditional human advisors, robo-advisors charge fees ranging from 0.2% to 1.0% of Assets Under Management while traditional financial planners charged average fees of 1.35% of Assets Under Management according to a survey conducted by AdvisoryHQ News.
In the United States, robo-advisors should be registered investment advisors, which are regulated be Security and Exchange Commission (SEC). In the United Kingdom they are regulated by the Financial Conduct Authority.

Assets Managed under Robo Advisors:
As of October 2017, robo-advisors had $224 billion in assets under management.
The following are the largest robo-advisors by assets under management:
Company Country AUM (millions of US$)
The Vanguard Group
U.S. 83,000
Charles Schwab Corporation
U.S. 19,400
Betterment
U.S. 9,058
Wealthfront
U.S. 6,763
Personal Capital
U.S. 4,344