Trading Places: The Rise of the DIY Investors and Robo-Advisor Trading Software
Be a part of the new generation of algorithmic trading software that is turning traditional Wall Street trading options on its head with DIY robotic trading software.
Trading Places: Wall Street vs Robo-Advisors
By Flipping Wall Street
January 20th, 2018
By now, most investors have heard of the new-wave of robo-investment trading software that is offered by companies such as Betterment and WealthFront. For over the past two century, the conventional stock trading process was to hire a personal financial advisor that on all accounts would look to diversify your portfolio and invest in trendy or hot stocks, ETFs and mutual funds. Robo-advisors which were introduced in 2008, have been steadily gaining market share from their human financial counterparts much the same way that companies like Amazon and Netflix have taken market share from companies like Walmart and local movie theaters such as Regal. With the rise of robo-advisors as an emergent technology for the DIY investors, changes are undoubtedly to come not just in their evolution, but also for clients and financial and investment advisors.
The reason why robo-advisors have become so popular among traders is that they are so much better at computations: volume, accuracy and speed. With an automated trading system on one’s personal computer, an investor has the convenience factor of always being able to view their portfolio and account instead of having to call their financial advisor to find out about their account. Along with the convenience of always knowing exactly what is happening with their trading portfolio, robo-advisors provide a key element in today’s trading market. They eliminate human emotion. With having an automated trading system performing the buying and selling of stocks and ETFs, an investor no longer needs to make quick and sometimes irrational decisions. The algorithms within the trading software are designed to buy low and sell high.
Another key note to mention is the trust factor. While many people have lost trust in Wall Street and their financial advisors, robo-advisors are providing a trust factor to the DIY investor as they are able to customize their own trading strategies, back-test these strategies and symbols to see past performances and even simulate these strategies without risking real money until they feel confident in the selection of symbols and strategies to trade in the market.
A recent study by Deloitte estimated that “assets under automated management” (including hybrid offerings) in the U.S. will grow to U.S. $5 trillion to U.S. $7 trillion by the year 2025. Currently, the estimated assets under automated management is believed to be around $300 billion. This increase would represent between 10% and 15% of total retail financial assets under management. By the end of 2016, the Fitch Ratings estimated that all robo-advisors managed under U.S. at $100B in assets. The Fitch Ratings predicts double-digit growth in assets under management over the next several years.
With the shift in the economy, and as more millennials begin to make higher salaries and take an interest in stock trading, robo-advisor software has provided a revolutionary new way for new trading investors to enter the market. Millennials seem to not care about a 200 year history of an established fund company as more innovative and modern technology such as robo-advisor software is offering a cheaper and more personalized trading experience. In fact, millennials are taking an interest in even working for financial institutions that have embraced robo-advisor software.
It’s clear that robo-advisors and Artificial Intelligence (AI) play an important and growing role in the financial services industry. In fact, AI is growing exponentially in enterprises. Companies that are at the digital forefront such as Google, Facebook, and Microsoft are investing vast amounts of money in AI — believed to be somewhere between $20 billion and $30 billion alone in 2016. A 2017 Deloitte survey suggested that 20% of many U.S. well-established firms have made substantial investments in AI as well. As the costs of AI-enabled tools continue to decrease and availability continues to rise, the projections of companies in every industry to invest in AI will far exceed the 20% in upcoming years.
With all the latest news that robo-advisors have garnered in media and the mass popularity they have won among their users, the fintech robo-advisors industry will continue to disrupt the financial services industry. As a newcomer to the fintech scene, Flipping Wall Street’s FLIP trading software which was created by former Wall Street portfolio and risks managers, was designed to be a digital account management service that utilizes trading algorithms to actively buy and sell stocks and ETFs.
For many investors who lack an advanced understanding of how the stock market works, FLIP makes the normally difficult investing decisions automated with pre-programmed strategies that base buy and sell decisions strictly on changes in market conditions. FLIP also provides its DIY investors the ability to back test trading strategies with whatever stock symbol or ETF the user chooses along with the ability to simulate these strategies until the user is comfortable trading with real money in the market.
To highlight the FLIP robotic software is best for:
- Hands-off investors
- Retirement investors
- For both users who either have low or high account balances
- Users who like goal-based tools
- No account minimum to begin
- Users who like to back test trading strategies and symbols
- Users who like plug and play software with no technical experience required
Contact Flipping Wall Street today to learn more about the automated FLIP trading software and how this form of artificial intelligence can financially benefit you today!