Smart investment management websites (or Robo-Advisors) appeared in 2005, and they are becoming an important new branch of the financial advisory industry. Most early investment advisers came from large commercial banks, and they mainly served high net worth clients with substantial assets. But in recent years, emerging intelligent investment management websites broke the traditional monopoly market and brought a fresh play to the financial advisory industry. In the U.S., as with traditional financial advisors, smart financial websites are required to register with the Securities and Exchange Commission (SEC). Such sites usually focus solely on developing portfolios and asset management. Although different websites offer different portfolio recommendations for users, these sites have a commonality that they all provide professional, rational portfolio management for users based on computer algorithms, thus minimizing human intervention. Because these sites charge far less than traditional financial advisers, while avoiding unnecessary fees and taxes, they are widely welcomed by middle class investors. In September 2014, the Swiss research firm MyPrivateBankingResearch published a research report, which announced the results of their in-depth study on 14 leading companies (including eight U.S. companies and six European companies) in the global smart finance industry. By the end of 2014, the global wealth that registered investment advisers managed will reach 5 trillion dollars, and intelligent financial management companies’ assets will reach US$14 billion dollars, of which 83 percent will be located in the U.S. The results show that smart financial management sites have rapidly developed over the past decade, and Robo-Advisors are playing an increasingly important role in the financial advisory industry. This paper makes a preliminary study of six U.S. intelligent investment management companies (Betterment, Wealthfront, FutureAdvisor, MarketRiders, SigFig and WiseBanyan), which provide full financial advisory services using computer models and algorithms, to understand the current state of intelligent investment management.
