facebookWhat is the AUM (Assets under management) a Robo-Advisor will truly need in order to breakeven and turn a profit, so we can know that robo-advisors are ultimately truly self-sustainable? - Seedly
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Anonymous

16 May 2020

What is the AUM (Assets under management) a Robo-Advisor will truly need in order to breakeven and turn a profit, so we can know that robo-advisors are ultimately truly self-sustainable?

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    What are your thoughts?

    Asheesh Chanda

    Asheesh Chanda

    11 May 2020

    Level 8·Founder at Kristal.AI

    The most common revenue model for robo advisors is to charge a management fee on the the assets invested with them. Most charge somewhere between 0.2 to over 1% (Kristal.AI has zero fees for the first $50K invested)!

    That said, to operate profitably, it would probably take AUM of a few multiples $100M, depending on the robo advisor's structure and other factors

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      Hariz Arthur Maloy

      Hariz Arthur Maloy

      08 May 2020

      Level 15·Independent Financial Advisor at Promiseland Independent

      I truly think a minimum of $100m AUM. If most of that is charged at 0.6% p.a, that puts a yearly revenue of $600k. Possible to cover wages, business expenses, marketing costs, and break even or turn a tiny profit.

      But possibly closer to quarter of a billion is more likely a safer number to make proper money.

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