Who we trust for financial advice and where we go to get it appears to be changing. It is younger people who seem to be leading the way in what is believed to be a shift toward robot advisors and robo financial advice. What can a robo financial advisor offer that a human one can’t and what will this mean as regards to how we reach decisions based on the advice we receive? If robot advisors become our primary source of financial advice, will they ultimately replace financial advisors in years to come?
Who are ‘Millennials’?
A Millennial roughly equates to someone who turned eighteen around the year 2000. Which more or less means anyone born from around 1982 onwards. Often referred to as ‘Generation Y or Z’, Millennials are roughly 18-35 years of age. They are more likely to live at home with their parents after university or college and often have far more debt and financial concerns than previous generations. All of which makes for an interesting premise when it comes to financial advice and services.
We know the internet has revolutionised the way we communicate and search for information. Access to information is instantaneous and many of the key services we used to find on the high street are now available at the touch of a button – either online or as a handy app. Banking and financial services are having to move fast to keep up.
So, what are Millennials looking for and why are they putting their trust in a robot financial advisor as opposed to a human?
Millennials and financial services
Research in the US has shown that Millennials are just as happy to trust the advice of a robot advisor, as they are a human. United States market research company, Forrester conducted an online survey of adults over 20 markets to determine their need for, and perception of, financial services.
The results of the survey indicated that Millennials:
- Want financial advice
- Are not afraid to share their personal information to get this advice
- Don’t have confidence in the advice they receive.
If they go looking for advice then they:
- Prefer to use apps and digital touch points to access advice – Millennials will use mobile apps for most of the key financial services, such as banking, credit cards, payments, investments and wealth management.
- Use their mobile phone as the main point of financial advice – nearly half of all Millennials taking part in the survey said they preferred to use their mobile phone when accessing financial advice.
- Are interested in digital advice – Millennials were far more likely to trust the digital financial advice they were given and act on it.
Robo advisors vs financial advisors
At Acumen, we are all for progress and moving with the times. However, in an age when cybercrime is massively on the increase, and the opportunities for criminals to steal data is very real, then perhaps the digital financial world isn’t all it seems. Despite what we experience in the online world, and our interaction with it, nothing will ever beat face-to-face contact. Particularly when dealing with such confidential and sensitive issues as personal finance.
An automated service is just that – automatic. In a fast-paced environment, where we are time poor, a robo financial advisor may seem like the perfect solution but will it ever be able to adapt advice to your specific requirements? We are all individuals with individual financial needs after all.
At Acumen, you’ll receive tailor-made financial advice that you can trust – not just an algorithm driven basket of choices. So, why not leave the apps to make life easier in other areas of life and let Acumen be there in person to give you advice you can rely on.
Visit our website to find out more about how we can help you to plan your finances and your future.