Surveys
Investors Are Just Not That Into Robo-Advisors – Survey
As wealth management becomes increasingly digital, investors have expressed concerns over the lack of a personal touch with their financial advisor, the study finds.
It turns out that although most investors think that wealth management advice is becoming digital they still value human advice, according to a new survey.
The findings come from Navigator Investment Services – an integrated investment platform under Singalife with Aviva – who worked with EY (Ernst & Young Advisory Pte Ltd) to look into the industry. Entitled Advancing the Art of Advisory: Is Advisory Still Relevant?, the report examines wealth trends that are redefining how financial advisors engage and serve their clients as well as how they can be of relevance in a digital-first era.
The survey was conducted with 2,500 wealth management investors with varied education, occupation, risk tolerance and psychographic profiles. Geographies covered: 21 locations across North America, Latin America, Europe, the Middle East and Asia-Pacific.
In Asia, it is projected that younger generations will inherit $2.5 trillion of family wealth by 2030. With changes in preferences of the younger and digitally savvy generation and increasing competition from the self-serve digital wealth platforms, this questions how much of the pie is left for the advisory business.
The report finds that 72 per cent of investors prefer to retain the human touch when it comes to advisory services, consisting of advisor-led relationships (35 per cent) and hybrid “phygital" (a combination of both digital and physical) relationships (37 per cent).
This correlates with a 2022 CFA Institute study which found that 66 per cent of retail investors consider their primary financial advisor as their most trusted source for wealth management advice, surpassing online research (9 per cent) and friends and family (7 per cent).
Investors “trust that their advisors will act in their best interests,” is the top attribute for selecting a wealth management provider (34 per cent). This is followed by the ability to achieve high returns (21 per cent), their commitment to ethical conduct (15 per cent) and whether they were a trusted recommendation (15 per cent). Fees were the least important consideration (7 per cent) suggesting that investors are willing to engage advisors.
The report also revealed that investors are more likely to engage advisors during major life events, such as starting a new business (61 per cent), buying a home (60 per cent), or inheriting money (59 per cent).
“While the rate of digital adoption has been increasing, the desire for a greater human touch continues to grow in tandem. Our report validates the value of advisory services as a highly trusted source of advice that will not be easily replaced by self-directed, digital investment options. These observations bode well for financial advisors, but in order to sustain that competitive edge, they will need to address the critical blind spots to truly enhance client value propositions,” Akhil Doegar, chief executive, Navigator, said.
