The difficult part is getting regulated, and raising money.

Robo-advisers are subject to the same regulation as traditional asset managers - a regulatory burden which is only likely to increase over time. The legal fees associated with regulation are not cheap.

Compounding the problem, a competitive robo-adviser needs to offer lower fees than a traditional asset manager. Probably they need to be in the 0.25-0.5% range, which means that for each $1m under management they are picking up $5,000 of revenue. Out of that they need to pay salaries, infrastructure costs, legal costs, rent, taxes etc. Let's be conservative and say that these costs are $2.5m per year. That means that a robo-advisor needs about $0.5bn under management before it begins to turn a profit.

I don't think it's really suitable as a side project.

You could just start with a free open source product. Far more disruptive. You could launch it offshore and unregulated if you want to cut costs.

It depends on whether you want to "disrupt" or to earn a living yourself.

Ah, well the difference seems to be in the uk there is a push for robo advisors not asset managers (recent FCA ruling).

So holding assets under management is less the issue than arranging purchase on behalf of clients.

Either way the cost issue dominates.

If that's literally all you do, I as a potential client should just go out and buy the underlying assets myself.

You could, but these things have potential value because they save time.

Anyone can sit at a screen and pick stocks all day, and I'd guess most of people of average intelligence would do better than the markets given a few simple strategies - because most brokers seem happy to make more money from fees than from investment gains.

But not many people want to do this. If you start selling a maintenance-free money machine, it's not going to be hard to get sales.

Of course if enough people start using it, it stops working. But that's a different problem.