The growth in digital investment assets in 2020 was fueled partly by strong stock market growth; the S&P 500 grew 16% in 2020. But there were many other factors at play that doubled the asset growth on digital investment platforms. Investors are more comfortable using digital-only channels to manage their investments, and many new and existing investors entered the stock market after the crash of March 2020.
“Digital investment management assets represent a small share of the overall U.S. wealth management industry, but their strategic importance is large, as is their growth potential due to the growing acceptance among firms and investors of managing investments through digital channels. Firms with the strongest growth potential include those with multiple distribution channels, especially through the workplace,” explains Aite Group senior analyst Sophie Schmitt. “As digital investing becomes ubiquitous, stand-alone digital investment managers with direct-to-consumer models are in a race to differentiate through product and service expansion into cash management, lending, and more active investment management options,” she says.
This annual report series is an outlet for Aite Group’s monitoring of the digital investment management space. By contextualizing the latest events in the market, tracking new entrants and exits, and speaking to multiple digital investment management firms, Aite Group aims to understand where the market is currently and where it is heading. For this report, Aite Group relied on direct reports and interviews from the largest digital investment managers as well as SEC form ADV data.
