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Komfie Manalo, Opalesque Asia:

Robo-advisory could provide more cost effective solution than buying funds or even an ETF because such a technology has the potential to reduce intermediation costs and improve services offered by fund managers.

Speaking at the latest Opalesque Singapore Roundtable, Rajesh Sundaresan of Lighthouse Canton said that robo-advisory is going to be a crowded space soon as more robo-advisors are likely to hit the market next year. He said that going forward institutions would be compelled to offer robo-advisors the way banks are obliged to provide their clients with ATMs whether they make money off ATMs or not.

Sundaresan explained, "While most institutions are unlikely to make money on their robo-advisory business, they nevertheless feel compelled to offer it as a basic hygiene factor, just like banks need to offer ATMs whether they make money off ATMs or not. Customers are demanding access to low cost and efficient advisory online and institutions need to cater to that demand."

With the expected onset of robo-advisors, Sundaresan said fund managers should be aware of this new competitive front where services are added without upfront fees, the cost of setting up a fund structure and management fees, adding that even retail customers can access a new level of investment products and services at a......................

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