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Why the heck isnt JPMChase buying one of these platforms?!?]]
Broadly speaking, the retail market can be segmented on two axes: net worth and involvement.
Low net worth, high involvement are day traders: they are profitable through fees, PFOF, et cetera. High net worth, high involvement doesn’t tend to exist long enough to specialise in; they’re, professionals, have better things to do or lose their money.
Low net worth, low involvement is patient capital. Not super profitable per se. But the most likely to develop into the last category: high net worth, low involvement; the money maker.
Robo-advisers targeted the third category. They got more of the first. Those not only bolted to crypto and Robinhood. They also incurred higher costs to the firm while promising less development potential to the fourth category. The actual third category participants, to a large degree, don’t need much more than was available in 1993, or at least are savvy enough not to find themselves paying for it.
Broadly speaking, the retail market can be segmented on two axes: net worth and involvement.
Low net worth, high involvement are day traders: they are profitable through fees, PFOF, et cetera. High net worth, high involvement doesn’t tend to exist long enough to specialise in; they’re, professionals, have better things to do or lose their money.
Low net worth, low involvement is patient capital. Not super profitable per se. But the most likely to develop into the last category: high net worth, low involvement; the money maker.
Robo-advisers targeted the third category. They got more of the first. Those not only bolted to crypto and Robinhood. They also incurred higher costs to the firm while promising less development potential to the fourth category. The actual third category participants, to a large degree, don’t need much more than was available in 1993, or at least are savvy enough not to find themselves paying for it.