Traditionally, “investments had to be sold”. But then, new players entered the market and began offering fully digitally managed investment services – Robo Advisers. This new investment concept started a hype and celebrated initial success on both the client and the provider side. Soon, however, criticism grew. The digital solutions enabled process efficiency but left little room for individualisation, which is a core element of client-oriented investment services.

This led to the idea of combining the best of both worlds. Hybrid portfolio management emerged as the perfect blend of digital solutions’ maximum process efficiency and the adviser’s human touch. Since up to 100% of the portfolio management process can be digitized, the marginal costs per client drop to almost zero. Digital portfolio management thus enables to tap into new customer segments and democratises access to exclusive wealth management services even for retail clients.

Incumbents quickly recognised the benefits and began launching their own personalised digital portfolio management offerings.

One example is Union Investment’s digital portfolio management offering, which has been a tremendous success and has attracted an investment volume of €5 billion within a very short time frame.

Some providers have relied on a modular concept from the outset, permitting, for example, theme-based investments in addition to risk-adjusted investments. A concept that works.