Millennials Prefer Human Financial Advisers

A majority of young investors believe human advisers can generate a better ROI than robo-advisers, a recent survey finds.

A poll commissioned by the loan refinancing firm LendEDU found that 46.41% of Millennials who are currently saving for retirement use a human financial adviser as opposed to only 24.30% who use a robo-adviser.

In fact, 61.68% of respondents who don’t use an automated adviser say they’ve never heard of one, possibly giving light to an underserved market in the financial services industry.

Still, the survey found that the majority of respondents were somewhat reluctant to letting a machine manage their investments. More than half (62.35%) said robo-advisers are more likely to lose their money, and 51.59% said robo-advisers are more likely to make a mistake managing their money. In addition, 68.92% said human financial advisers are more likely to get a better return on investment (ROI).

When asked what they liked about working with human financial advisers, 53.65% said they make it easy to get started, and 15.88% said they offer the most cost-efficient way to get started. However, only 3.86% said they offered excellent tax efficiency, suggesting advisers may benefit from maximizing client satisfaction in this area.

Perhaps even more surprising, only 9.01% said the main selling point of working with a human was the human touch. Similarly, only 12.3% of respondents working with robo-advisers said they preferred this option because of the technology. LendEDU notes, “The difference is minimal, and technology, one of the huge selling-points of robo-advisors, is really not all too preferred to having the human touch guide your investment strategy.”

A more well-received benefit of robo-advisers, preferred by 17.6% of users, was 24/7 accessibility. Because market swings can happen at any moment, it’s understandable this feature will stand out among investors. Still it’s clear that above all else, Millennials in the study value ease of entering the stock market, and cost-efficiency when it comes to services.

Today, firms are pumping plenty of capital into enhancing the technology that drives robo-advisers – some, with substantial results. However, some research suggests investors prefer robo-advice with a human touch. Thus, several providers including Fidelity Investments, Betterment and RobustWealth are rolling out hybrid solutions that combine the technical features of automated advice with the skills of a financial professional. And although robo-advisers initially sought out the retail investor market, the combination of automated and human advice is also being seen in the defined contribution (DC) space.

Data from the LendEDU study was gathered from a survey of 502 Millennial respondents between the ages of 18 and 34 who are saving for retirement. The full study can be found at