Less than a decade after the introduction of robo-advisers, a new study by Spectrem reveals workers are utilizing the technological advice more than human advisers.
The report, titled Wealthy Investors and Their Perceptions of Robo-Advisors, surveyed investors with a net worth larger than $100,000, and found that almost a third believe robo-advisers are more efficient than human advisers in choosing stocks for risk tolerance (30%) and picking investments for retirement plans (28%).
The survey reported that 56% of investors who currently employ a robo-adviser never consulted with advisers before using the service. Sixty-four percent of those users were over the age of 61, meaning that older first-time investors would rather utilize robo-advisers. The report notes that while younger investors, such as Millennials, may be most likely to turn to the service, the average wealthy investor using robo-advisers is 48 years old, and more than 20% of those surveyed are over the age of 61. Additionally, 16% of those older users employ robo-advisers as their primary source in advice-seeking.
However, not everyone is a fan of the technology-based advisory solution. The study reports that among non-robo-users, 49% say they do not utilize a robo-adviser because of a lack of humanized attention.
While the report highlights robo-adviser usage, it also indicates how human advisers are accepting the increased utilization. Almost half (46%) of wealthy investors suggested their traditional adviser recommended using the technology offered by the firm for a share of their assets, in order to lessen fees and simplify the investment process.
“Our research consistently shows that robo-advisors are becoming increasingly accepted by wealthy investors,” said George Walper, president at Spectrem. “To remain competitive, traditional advisors should lead with their unique expertise in establishing a financial plan and emphasize their ability to evaluate and react to world events.”
More information on the findings can be found here.