break even amount for roboadvisors

[ftpofmpo]

interest fact from economist: roboadvisors charging low feeds of 0.25% require at least 10bil to break even!!

 

[JuniorLion]

Details please

 

[limster]

interest fact from economist: roboadvisors charging low feeds of 0.25% require at least 10bil to break even!!

its an important question. there seem to be a lot of startups, but the market is small and they are burning cash trying to build up customer base. if they don't get enough AUM, they may have to exit.

IT hosting and security requirements for financial institutions cost a whole lot more than hosting a website for a bubble tea shop for instance.

 

[Mr. Wood]

a lot of VC supporting behind u dunno only

 

[limster]

iFast, with $9 billion AUM, reported quarterly profit of S$2.45m

With so many roboadvisors launching, my feeling is that some will struggle to even get $100m AUM and will be forced to exit because which VC is going to continue to pour money into a clear loser?

Even uber realised the SG market not big enough and exited.

 

[peipei1]

What happens if a robo advisor exit the market?
I find we are too small to support them while still seeing insurance agents actively working selling polices in public places

 

[Mecisteus]

Let's say the company has 5 employees earning $80k annually.

Total employee cost is $400k annually.

Assuming office space is $20k per month. Adds up to $240k annually.

I haven't include other costs.

Let's assume a 0.25% management fee.

AUM has to be at least $256M to survive.

For a small Singapore market, I doubt the robo advisers can hit this size easily.

First few years, confirm bleeding badly.

 

[Mr. Wood]

iFast, with $9 billion AUM, reported quarterly profit of S$2.45m

With so many roboadvisors launching, my feeling is that some will struggle to even get $100m AUM and will be forced to exit because which VC is going to continue to pour money into a clear loser?

Even uber realised the SG market not big enough and exited.

Tema.....

....ok, better dun say too much.

 

[Mr. Wood]

What happens if a robo advisor exit the market?
I find we are too small to support them while still seeing insurance agents actively working selling polices in public places

insurance agents shud just stick with selling insurance.
dunno wht shat unit trusts oso come out sell.
fkers.

 

[peipei1]

The 10bil figure is for us robo? That is huge but so is us market.
In Singapore, seeing that mike did a rudimentary sum, i feel the break even is okay as long as we have only 10 robos, which i guessing is what we have now. Assuming each investor contribute $30k, a robo just need 18k investors, not bad! I think ssb already have a few millions every tranche, so these robos have to snatch biz from ssb, ilp and traditional ut!

Fintech startup are leaner and rely on AI and software, it is not surprising robos keep popping up to take in low interest liquidity

 

[Zenest]

Will robo advisers platform also derive income from fund managers?

 

[Mecisteus]

Will robo advisers platform also derive income from fund managers?

It should be the other way.