The assets under the management of the digital investments market – including robo-advisors and neobrokers – have snowballed over the past years, rising from $3,8-billion in 2017 to a whopping $2,26-trillion in 2023.
And the entire market is expected to continue growing this year, but at a much slower pace than expected, according to Altindex which says the total value of assets under the management of neobrokers and robo-advisors is set to hit $2,8-trillion in 2024 – or 30% less than earlier forecast.
Thanks to robo advisors, neobrokers, and trading apps people can invest in stocks, bonds, and other assets without actively managing their portfolio – with algorithms adjusting their risk preferences, making data-driven decisions, and maximising returns. This more convenient way of trading, which offers a wider range of investment options and lower fees, has drawn millions of people to the market.
Between 2017 and 2023, the number of people using these services has increased 35 times, jumping from roughly 15-million to more than half a billion. Thanks to this massive user base, the entire market has seen five consecutive years of triple-digit growth. And while the market forecast remains optimistic, the latest Statista survey shows quite a lower annual growth rate than expected last year.
According to Statista`s 2024 Market Insights, the total transaction value in the digital investments industry will grow by 23% and hit $2,79-trillion this year, nearly 30% less than the $3,9-trillion expected in the 2023 market forecast. Most of that decline will come from the robo-advisors segment. Last year, Statista projected the robo-advisors segment to hit $3,39-trillion transaction value in 2024; now, that figure is 46% smaller and stands at $1,8-trillion.
On a positive note, the neobrokers market is forecast to grow much more than expected last year. In May last year, Statista data showed this sector will hit roughly half a billion in value in 2024. However, the growth projections have become much more optimistic since then. The latest data shows the total value of assets under the management of neobrokers will hit $980-billion in 2024, or nearly twice as much as expected last year. Statista expects this figure to continue growing to $1,07-trillion by 2027, or 75% more than the 2023 forecast.
Despite a 30% drop in the projected growth rate, the digital investment market continues to demonstrate its resilience. The market is expected to welcome an impressive number of users this year – testament to the efficiency, speed, and low service fees it offers.
Statista expects 53-million people to join the digital investments space in 2024, pushing the total user count to nearly 600-million. The neobrokers segment will make up almost 95% of all users, or 558-million. On the other hand, robo-advisors will have 17 times less users than that, or 31-million. By 2027, the total number of users in the digital investment market will touch almost 630-million.