The Big Spenddown: Digital Investment Advice and Decumulation

Digital investment advice providers have traditionally focused on the process of assets accumulation. But as Baby Boomers and Gen Xers age, they will need to shift from accumulation to decumulation, and there is less agreement about how to manage payouts during retirement. The chapter begins with a brief overview of the development of digital investment advice services, followed by a review of the challenges of asset decumulation in retirement, many of which apply to both traditional and robo-advisors. Yet because robos operate primarily in a realm of electronic communications, they face a number of unique demands. The chapter briefly discusses the issues with which digital advice providers wrestle as they try to provide decumulation services for their clients and it ends by discussing implications for the robo marketplace.