IT’S SOMETHING THAT’S NOT GOING TO GO BACKWARD.

consider these projections optimistic, with more than 75 per cent of those polled by PwC expecting robos to generate less than US$100 billion for ETFs over the next five years. Asset managers are aware of the robo-adviser trend, but only in “a superficial manner, like much of the general public,” Aite senior analyst Javier Paz said.

Robos have found a natural partner in ETFs based on their shared emphasis on with participants from the European and Asian markets the most cautious in their expectations.

That wariness will end up being their loss, according to PwC. Those who resist the shift to automated advice and other digital technologies risk endangering their business and missing a huge opportunity, the accounting and auditing firm said in its report.

About 17 million investors will use robo-advice by 2021, up from 1.8 million last year, with millennials most likely to sign on, according to Aite. That poses both a concentration and communication problem that robos, investors and regulators need to bear in mind.

Many of these investors could end up in the same ETFs. For example, all eight digital advisers considered by Aite own Vanguard Group’s FTSE Emerging Markets ETF, better known by its ticker VWO. While that will invite more liquidity and more inflows, it also requires better regulatory oversight, Aite’s Paz said.

Robo advisers could, however, take early action to counter another concern for investors — what happens during a market sell-off. After Britain voted to leave the European Union, Betterment halted trading to allow markets to stabilize. This move was communicated to financial advisers but not to retail users unless they called the firm, Aite said in the report.

“I see it as good business practice to let clients know when and why a robo platform may experience a trade suspension,” Paz said. “This kind of communication should precede a major market event and not be the result of increased regulation.”