New survey shows that younger investors are likely to use self-directed options, but many also use human financial advisors
Robots are going to take our jobs: it’s a well-use trope that has been around for decades but are financial advisors now at greater risk?
In a world where there’s an app for everything and younger generations have only known that scenario, wealth management is certainly embracing more technology.
But a new survey of millennials reveals that, despite their openness to using wealth technology, they are also convinced of the value that an experienced human financial advisor (FA) brings.
Broadridge Financial Solutions’ survey found that 96% of all investors that currently use an FA are satisfied, while 44% of those that do not have an FA are likely to begin working with one over the next two years.
But for millennials, 65% of those without an advisor currently plan to change that in the medium term.
Respondents feel that working with an FA means less financial stress.
The tech challenge
As welcome as the survey’s validation for FAs is, technology continues to challenge the status quo.
The poll shows that 52% of all investors and 65% of millennials now use a self-directed brokerage account. This is highest among high-net-worth investors. It also reveals that usage is set to grow over the next 12 months.
Robo-advisors are less popular currently than self-directed brokerage accounts with awareness at just 33% of investors and usage at 6%. However, three quarters of millennials who were not already aware of robo-advisors said they are likely to try them in the next 12 months.
Andrew Guillette, VP of distribution insights, Americas at Broadridge, commented that market volatility has increased investor demand for a greater say in managing their assets and the wealth management industry has to respond.
“Financial advisors now sit at a critical juncture where they need to directly demonstrate their value by providing client-centric tools, products and advice,” he said. “Asset and wealth managers have a prime opportunity to provide the most up-to-date technology tools and new products to help advisors meet this shifting demand.”
The survey was conducted in April and May 2021 among 1,000 adults in the US with investable assets of US$10K+ and a household income of $25K+.
