Vanguard is ending robo-advisors in Germany: What that means for investors

Vanguard is ending robo-advisors in Germany: What that means for investors

According to a report by www.capital.de, the US fund provider Vanguard has discontinued its robo-advisor business in Germany. Although the company launched a robo-advisor in Germany in spring 2022, the response from investors fell short of expectations.

Vanguard is the second largest asset manager in the world after Blackrock and a pioneer in passive index fund trading. The robo-advisor in the USA is by far the largest provider and manages around $200 billion in customer money. In Germany, the project was prepared largely in secret in advance and started with the digital consulting unit of the Boston Consulting Group.

The reason for discontinuing the robo-advisor business is that demand from German investors remained below expectations. According to Jesper Wahrendorf, head of Vanguard's digital consulting unit, the response after the launch of the offer on the German market was significantly lower than expected.

The discontinuation of the robo-advisor business in Germany could have an impact on the digitalization of wealth management in Germany. While other providers already offer similar automated custody offerings, Vanguard's withdrawal could make other companies more cautious about making similar investments. It remains to be seen whether German investors will show increasing interest in digital asset management in the future or whether the discontinuation of the Vanguard robo-advisor represents a warning signal for the market.