Financial advisory and broking services including robo advisory and auto-trading
FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.
Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment.
Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.
Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.
There are also FinTech-advertising-services which advertise various financial services or products.
Attitude of the country towards modern financial advisory and broking services
Robo-advisory is a fast-growing industry in Colombia. Due to their user-friendly, automated processes and low-cost portfolio management, robo-advisors are posing a challenge to traditional financial institutions and financial advisory services.
In Colombia, the use of new technologies has made more efficient, suitable, and effective the rendering of services by financial institutions. Thus, financial entities are not oblivious to the use of algorithms and models that can help them to provide advice with better results.
Colombian financial group Grupo Bancolombia joined the robo-advisory industry with the launch of an automated advisor for the clients of its brokerage firm, Valores Bancolombia.
Obligations and requirements to provide financial advisory and broking services, or ancillary services described above
Colombian legislation lacks a clear and specific legal framework regulating FinTechs offering robo-advisory services in Colombia.
Broking services and fund management services can only be exercised in Colombia by those companies which are duly authorised by the Colombian State, and which are subject to the Colombian Finance Superintendence’s supervision.
Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area
Colombian financial services market is highly regulated and governed by several laws and decrees, such as Law 964 of 2005 and Decree 2555 of 2010.
Colombian law states the possibility of providing professional advice through technology tools. These services are subject to the same rules applicable to conventional advice. In addition, there are some special requirements in relation to the use of new technologies established by the Colombian Financial Superintendence.
Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area
The online financial advisory services market is small. Colombia's first online consulting platform for small and medium-sized enterprises MasterBiz (an alliance Global Network of Exportation) reaches Colombia. The MasterCard Biz portal seeks to foster business growth in Colombia and Latin America, as well as promote business competitiveness through tools and solutions. This launch responds to one of MasterCard's priorities to promote and energize the region's economy through small and medium-sized entrepreneurs.
Additional comments regarding the economic situation for financial advisory and broking services as well as adjacent services or what FinTech’s must be aware of in this business area
This market continues to grow with the good economic moment, the interest of foreign companies to enter the Colombian market, as well as local companies to expand their borders. And, in all cases, large consulting firms are indispensable. Yet, with the lack of online regulation and the limitations as to who can consult puts a stop to the boom of online consulting.