Financial markets worldwide experienced their worst hit due to the ongoing global crisis from the Coronavirus pandemic. Coupled with trade wars, global isolation, and dips in stock indices, we are suffering from the worst crisis since 2008. This is the time for the Robo Advisory Market, the most recent market advisor, to shine. Entrepreneur John Zhang, who runs WealthGap, talks about the Robo Advisory Market and the impact that the COVID-19 virus has had on it.
A Robo advisor is a financial advisor that assists with managing investments online and also provides sound financial advice should you need it. A Robo advisor offers its advice and services based on the mathematical output derived from financial algorithms. Since the market collapse of 2008, Robo Advisors have been helpful – and successful – in gauging the changing markets and balancing clients’ assets. The current pandemic, in particular, has increased the use of Robo advisors online.
John Zhang is convinced that the global market is slowly, but surely, turning to Robo advisory. It was his dream to start a hedge fund. When he learned about Robo advisors, he was encouraged to invest in them. He even went on to develop an app to invest in hedge fund quality portfolios. The idea is to remove the need to visit a human financial advisor because, according to Zhang, most millennials do not want to interact with a human when they want to invest in financial products. They don’t want to spend the time to travel to the bank and spend an hour or two doing all the paperwork. It is easier to invest online with the help of a Robo advisor.
As far as the impact of the pandemic on Robo Advisory is concerned, John Zhang is confident that this industry will thrive. There have been a record number of accounts opened at Robo Advisor companies during this pandemic. Most banks are closed and so the only option for people is to look for financial products online. Here is where Robo Advisors shine because they originally provide a completely online experience whereas banks are more used providing an offline experience.
With market opening worldwide, and many companies trying to regain a foothold in the market, many investment opportunities are going to open up for investors to take a chance with.
According to Zhang, since this pandemic has already thrown things for a loop, it is difficult to understand or predict what the future will bring. But with Robo advisors suggesting low-fee investments based on financial algorithms, clients will also be able to plan for unemployment in the job sector once the Coronavirus crisis is over. Planning ahead for such events can be beneficial to the client.
Though the damage is ongoing, a full and clear picture has yet to be formed. Zhang believes that Robo advisors can help to prepare us for the worst that is possibly yet to come.