Robo-advisers may be all the rage, but wealthy investors aren't buying into the trend.
On a scale of 1 to 100 (1 being low and 100 being high), wealthy investors rated their knowledge of robo-advisers at 15.47, according to a new Spectrem study. Meanwhile, only 6% said they have ever used a robo-adviser.
Of those, only 47% of respondents characterized themselves as being satisfied with their robo-adviser, compared with 85% of those who said they were satisfied with their traditional adviser, according to the survey.
The survey found that wealthy investors are more likely to use robo-advisers if they already have a traditional adviser with whom they can talk face-to-face about their finances.
“They're hesitant about the concept of sitting down, putting their information in and getting an answer,” Spectrem chief executive George H. Walper, Jr. said. “They would like a relationship with an adviser and then to utilize the technology in conjunction with that.”
“At the moment, the introduction of any new technology, younger folks adapt faster,” Mr. Walper said. “It doesn't mean 20 year olds. It means 30 and 40 year olds, which is the sweet spot for financial advisers.”
Indeed, the survey found that 17% of investors 35 and younger and 11% of those ages 36-44 currently use a robo-adviser, compared with 6% of those 45-54, 4% of those 55-64 and 4% of those 65 and older.
Wealthy investors cited a number of reasons why they don't use robo-advisers. For example, 59% do not use them because they are too impersonal, while 36% simply do not trust them. Fifty-percent of wealthy investors prefer to meet their adviser face-to-face.
"Not every client wants the same sort of relationship with an adviser," Mr. Walper said. "But they still view getting help from advisers so advisers can provide the tools."
The Spectrem study broke down the 3,090 respondents in three categories: mass affluent, which is $100,000 to $999,999; millionaire, which is $1,000,000 to $4,999,999; and ultra-high net worth, which is $5,000,000 to $25,000,000.
“Advisers who don't take advantage of technology that is being created every year always runs the risk that they are not going to stay current,” Mr. Walper said. “It's an asset — not a threat.”