Do human advisers make clients happier than robos?

Investors appreciate both, but do turn to traditional advisers over digital ones for some services.
DEC 07, 2016
Investors using digital financial advisers are nearly as happy as those who work with traditional advisers, though there are certain services that most people still want human help with, a new survey found. About 75% of clients are satisfied or very satisfied with the advice and services they get from traditional financial planners, compared to 73% of those who work with an automated-investing platform, a survey of investors by the Financial Planning Association and Investopedia released Wednesday found. About 7% of the 2,002 investors surveyed said they use a robo-adviser, 18% said they had checked one out online and 58% said they were at least somewhat familiar with automated platforms for advice. So-called robo-advisers like Betterment and Wealthfront provide financial advice to clients online with minimal human interaction. (More: Robos to make banks a bigger competitor in advice market) The services investors identified as ones they still prefer getting from a human financial adviser are: estate planning, elder-care planning, tax planning and health-care planning. Education funding was an area where there was only a slight preference for having a human adviser over a machine. And investors were split on whether a human or robo-adviser was their top choice to provide help with finances related to buying a car or other large purchase, the survey found. (More: Older investors use both financial advisers and online advice) Many investors would like help from both traditional and online advisers, with 39% saying that's how they'd prefer to receive investment planning services.
Would you prefer to receive these services from an automated-investing platform, a financial planner or both?
Source: FPA and Investopedia's study, “High-Tech and High-Touch: Investors Make the Case for Converging Automated Investing Platforms and Financial Planning.”
“The debate about whether robos or human advisers will win is moot,” said David Siegel, chief executive of the financial education website Investopedia. He expects investors will start to demand a combination of both the cheaper benefits that automated platforms offer and the customized approach of human advisers. Ed Gjertsen, vice president of Mack Investment Securities and chairman of the Financial Planning Association, said advisers who just invest client assets are limiting their own success, and they are ignoring clients' desire for comprehensive advice. “The digital platforms offer an efficient way to manage client assets, which is a good thing,” he said. “Clients are looking for that to be complemented with comprehensive financial planning.”

Latest News

Bluespring, Merit ink new RIA partnerships
Bluespring, Merit ink new RIA partnerships

The two hybrid RIAs have widened their respective footprints with acquisitions in Kentucky and Pennsylvania.

SEC, Binance seek 60-day pause for lawsuit against exchange
SEC, Binance seek 60-day pause for lawsuit against exchange

The joint motion by the regulator and the giant crypto bourse comes as the recently installed crypto task force lays foundations for a formal framework.

Cresset Partners rebrands to Peakline
Cresset Partners rebrands to Peakline

With meaningful scale and growing client needs, the multibillion-dollar RIA's leader says the "time is right" to come into its own an independent private investment business.

Wealth management industry is facing a looming retirement crisis, report warns
Wealth management industry is facing a looming retirement crisis, report warns

Despite technology adding capacity, an advisor shortage is predicted.

Just 30% of people are very confident in managing their finances right now
Just 30% of people are very confident in managing their finances right now

And there's a large gap between the fears they have and the action they take.

SPONSORED Taylor Matthews on what's behind Farther's rapid growth

From 'no clients' to reshaping wealth management, Farther blends tech and trust to deliver family-office experience at scale.

SPONSORED Why wealth advisors should care about the future of federal tax policy

Blue Vault features expert strategies to harness for maximum client advantage.