Time for advisors and robos to declare a truce

By Staff | April 12, 2017 | Last updated on April 12, 2017
2 min read
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Tired of the advisor/robo-advisor debate?

Then let’s declare it officially over. After all, research shows that clients want both advisors and technology.

Confirming as much, a research report by Accenture finds that two-thirds (68%) of emerging wealthy and high-net-worth investors in North America prefer hybrid investment advice — a combination of traditional advisory services and low-cost digital tools — over either a human advisor or conventional robo-advisory services.

Read: Real RBC advisors are the new robo-advisors

Digital tools, formerly considered a key differentiator, are now a basic requirement for a majority of investors, finds the report. Surveyed investors identified about 20% of available digital tools as difference makers. Two years ago, almost 50% of available digital tools were identified as such.

“Digital is approaching commoditization,” says the report, “and […] digital platforms will need to continuously innovate to stand out from the rest.”

That customization might require a human touch.

For example, even if advice is provided virtually, a human advisor is still seen by a slight majority (51%) as the most reliable option for new investment ideas. Likewise, 57% of surveyed investors felt human advisors (virtual included) provide the best customized advice.

Tech makes for engaged clients

The report also finds that investors who use hybrid advice are more likely to seek advisory services.

In fact, hybrid users are nearly 50% more likely than those using only traditional or entirely automated advisory services to say they proactively seek and receive assistance on financial planning (64% versus 44%).

Investors who use hybrid services are also among the most likely to have discussed family needs with their advisors, including children’s financial needs (cited by 67%), parents’ long-term financial needs (58%) and estate and tax planning (42%).

But clients are wary of advice

Of course, being involved in one’s finances could mean more shopping around.

Almost 40% of respondents said they’d never take advice from their advisors without first consulting another source. For millennials, that number jumps to 50%.

And nearly seven out of 10 millennials (69%) are amenable to receiving investment advice from Google, Facebook, Amazon and other non-financial companies — providing yet another reason for advisors and robo-advisors to join forces.

Read the full report here.

About the survey: Accenture designed and commissioned the online survey of 1,354 active investors in the U.S. (1,082) and Canada (272), which was conducted in fall 2016. Respondents ranged in age from 21 to 70, across various levels of net worth, and included a near-even split by gender. The survey has an estimated margin of error of +/- 3%.

Also read:

Do human advisor fees offer more value than robo-advisor fees?

Effects of robotics revolution depend on your skills

Advisor.ca staff


The staff of Advisor.ca have been covering news for financial advisors since 1998.