Millennials Choose Robots Over In-person Financial Advice
The younger generation are deemed to prefer ‘robo-advice’ rather than in-person when seeking financial planning and investment guidance, according to research conducted by a Southern law firm.
Research reveals that young affluent millennials are far more comfortable to receive advice and information from robo-advisers than financial advisers.
Law firm, Michelmores, surveyed the millennials who had over £25,000 worth of investable assets. The data collected found that the cohort much preferred to use non-human advisers as 60 per cent of the respondents who were born in the 1990s preferred a robo-adviser, compared to 49 per cent of those born in the 1980s.
The figures showed that if the millennial had more money at their disposal, they are less likely to use the traditional adviser method.
According to the law firm, around 61 per cent of millennials who had assets of £75,000 or more would choose to take advice from a robo-adviser compared to 50 per cent of those with £25,000 – £74,999 worth of investable assets.
Interestingly, Fundscape chief executive Bella Caridade-Ferreira argues a puzzling point in the research which compares robo-advice to traditional advisers. She says:
“We are yet to see proper robo-advice in the market.
“The solutions in the market are robo-investments which is a different kettle of fish altogether.
“Robo-investment cannot provide advice on financial planning, tax and inheritance. It would be interesting to see how the questions were phrased or structured.
“The fact remains that the cost of acquiring clients through advertising is substantial. People are happy to take automated advice up to a point, but at some stage they want human intervention and that’s why robo-advice will be a long, slow burn. It’s a bit like being in a plane that operates on auto-pilot – people want to know that there’s a human being in the cockpit. The same is true of robo-advice.”
Bella states that the robo-advice culture will not get off the ground unless a large bank invests heavily into the technology and make it a reality for its majority of customers.
Managing Director of Next Wealth, Heather Hopkins says that research repeatedly indicates that the real value of advice is behaviour change. She said:
“People tend to buy high and sell low. Robos struggle to retain customers as their needs become complex.
“Robos that have been successful so far have worked with face to face financial advisers. Pure robo is really about portfolio management rather than offering much in the way of planning. That said, this may all change in the future. The challenge will be for businesses to persist to profit – which could be a long way off.”
Another piece of data which was captured from the research found that more than four in five wealthier millennials responded saying that they did trust financial advisers generally to some extent.
Michelmores private wealth partner Richard Cobb commented on the research. He said:
“Our research among millennials backs up a pattern we see emerging through clients; that millennials are fast embracing advancing technologies.”
“This is far from the end of traditional financial advisers though as we are increasingly seeing new clients looking for hybrid support, with face-to-face professional advice supported by real-time reporting technology to help achieve their investment goals. The relationships financial advisers have with their clients facilitate an in-depth understanding of their needs and challenges – robo-advice simply isn’t there yet.”
Legal technology within the Wills and probate industry has evolved and is now transforming the sector. Legal service providers have started to see legal technology as a game changer which can act as a driving force for increased efficiency and profitability.
With consumer expectations shifting in more recent years, the legal sector is now catching up to what clients expect with more and more firms/businesses looking at new systems so they can be more efficient. Using new technology has allowed firms to grow, provide a much better service, save time and in turn increases their revenue.