EXECUTIVE SUMMARY The robo-advice market will grow as traditional players launch digital platforms Key findings Critical success factors DEFINING ROBO-ADVICE Robo-advisors are digital investment management platforms The first client-facing robo-advisors were founded in 2008 Robo-advisors were preceded by PFM tools Automated advice platforms are often fintech startup companies B2C robo-advisors have been evolving, with traditional players building their platforms Robo-advice has also entered the B2B space Financial advisors can use existing solutions initially designed for the B2C market Robo-advice platforms are now offered by IT software developers Regulators are increasing the scrutiny on automated advice Regulators' attitudes towards robo-advice differ between markets The industry should use the robo-advice label carefully CLIENT-FACING ROBO-ADVISORS COMPETITIVE LANDSCAPE The US is the home of robo-advice US robo-advisors operate three typical business models The vanilla US robo-advisors appeal to cost-sensitive investors looking for simplicity Hybrid business models leverage the digital channel to offer advice provided by humans Robo-advisors have to introduce unique features to succeed in the long term UK robo-advisors have been lacking recognition The uptake of digital platforms in the UK differs from the US Few digital players have obtained advisory permissions Major UK competitors offer non-advised digital discretionary asset management Business models in other markets mostly follow US and UK competitors Theme-based investing can engage clients more More advanced portfolio management strategies could attract sophisticated investors Few robo-advisors operate in more than one market Universal financial services providers have the resources to launch innovative platforms Wealth managers are not concerned by robo-advisor competition HNW individuals in developed markets show little interest in robo-advice Robo-advisors are not sophisticated enough to compete with traditional wealth managers Human relationships remain vital for HNW investors AUTOMATED INVESTMENT TOOLS FOR HUMAN ADVISORS Relationship managers can be more efficient when backed by technology Retail robo-advisors should be interested in partnerships with human advisors Betterment Institutional partnered with Fidelity Hedgeable and Scalable Capital offer investment management for institutions RBC's advisors will be using FutureAdvisor's capabilities Jemstep started as a client-facing platform but shifted to work with advisors Automated advice platforms are becoming a standard product offered by banking software developers Envestnet built the Advisor Now portal Additiv offers software incorporating automation at four different levels APPENDIX Abbreviations and acronyms Definitions HNW Liquid assets Mass affluent Mass market Robo-advisor Methodology Competitor factsheets Verdict Financial's 2015 Global Retail Banking Insight Survey Verdict Financial's 2015 Global Wealth Managers Survey Exchange rates Bibliography Further reading About Verdict Financial Disclaimer

Table 1: Verdict Financial's competitor factsheet: Betterment Table 2: Verdict Financial's competitor factsheet: Wealthfront Table 3: Verdict Financial's competitor factsheet: Schwab Intelligent Portfolios Table 4: Verdict Financial's competitor factsheet: FutureAdvisor Table 5: Verdict Financial's competitor factsheet: Personal Capital Table 6: Verdict Financial's competitor factsheet: Vanguard Personal Advisor Services Table 7: Verdict Financial's competitor factsheet: Hedgeable Table 8: Verdict Financial's competitor factsheet: Money on Toast Table 9: Verdict Financial's competitor factsheet: Wealth Horizon Table 10: Verdict Financial's competitor factsheet: Nutmeg Table 11: Verdict Financial's competitor factsheet: HL Portfolio+ Table 12: Selected digital investment platforms outside the UK and the US Table 13: Verdict Financial's competitor factsheet: Stockspot Table 14: Verdict Financial's competitor factsheet: True Wealth Table 15: Selected established financial services firms' activity in the robo-advice space Table 16: US dollar exchange rates, December 31, 2014 and December 31, 2015 Figure 1: Selected US robo-advisors by business model Figure 2: US self-directed investors want to save on fees and invest easily Figure 3: The UK self-directed market is not fee-driven Figure 4: Selected competitors in the UK digital wealth management space Figure 5: HNW clients' level of interest in robo-advice is moderate Figure 6: Robo-advisors are too simple to compete with traditional wealth managers Figure 7: German wealth managers consider robo-advisors a threat to their business Figure 8: Contact with human advisors is vital for HNW clients Figure 9: US robo-advisors' low fees attract HNW clients' attention Figure 10: Automated investment tools can increase wealth managers' efficiency Figure 11: Betterment Institutional offers an easily integrated investment and client management solution Figure 12: Additiv's digital private banking platform is a solution for HNW clients