Advisers Using Robo-Advice for Older and Wealthier Clients

Jefferson National survey dispels the belief advisers are only offering the technology to younger investors.

Registered investment advisers (RIAs) and fee-based financial advisers are using robo-advice for older and wealthier clients, Jefferson National found in its inaugural Advisor Authority survey.

The financial planning industry has held the belief that advisers are only using robo-advice for younger clients with lower assets under management. However, Jefferson found that among the advisers using robo-advice, 52% are using robo-advice for clients with more than $1 million in investable assets. Among the advisers using robo-advice, 49% are using it for their younger Millennial clients, and another 49% are using it for their Boomer clients.

Nonetheless, Jefferson National found that usage of this technology among advisers as a whole is low; only 19% currently use any type of robo-advice and only 15% say they are very likely to integrate this model into their practice in the next 12 months.

Even advisers who are familiar with robo-advice are split on their feelings about it, with 48% saying it poses a threat, and 42% saying it does not pose a threat.

“Our Advisor Authority study found that the most successful advisers—those who earn more and manage more assets—are forward thinkers and early adopters when it comes to using technology, including robo-advisers,” says Mitchell Caplan, chief executive officer of Jefferson National. “While there is no replacement for the value of holistic guided advice, our research demonstrates that this new generation of digital advisory solutions can be incorporated into a successful adviser’s practice to create greater efficiencies—and more value for their clients. The most successful advisers understand that rather than a threat, robo-advisers are, in fact, an important part of a comprehensive offering.”

Harris Poll surveyed 535 RIAs and fee-based advisers online on behalf of Jefferson National. The full findings can be downloaded here.