Technology is a relatively new addition within the wealth management industry, from robo-advisors to AI-enabled chatbots. However, the need for human financial advice will not be pushed to the side any time soon, says GlobalData, a leading data and analytics company.
According to GlobalData’s recent ‘UK Investors Survey’, face-to-face communication, amongst millennials, still reigns supreme when arranging the buying and selling of investments. Of the most used services millennials choose when arranging investments 95% of them sill involves human interaction and expertise with only 5% involving solely robo-advisors.
Sergel Woldemichael, Wealth Management Analyst at GlobalData comments, ‘‘Digital services provides advantages for wealth managers, as a robo-advisor can reach new demographics such as the mass affluent, as well as offering operational efficiencies through the automation of tasks. However our survey data shows that the vast majority of the more digitally advanced younger generations still require human interaction and expertise before they will make an investment decision.’’
Traditional wealth managers have experienced multiple recessions and periods of market volatility, proving they are able to weather a storm and with a potential market downturn on the horizon, robo-advisors may not be ready to tackle the risks to client investments that come with it.
Woldemichael adds, “Pigeonholing the next generation into a digital chamber is the wrong way to view millennials. Mobile investment apps are unable to cater to the emotional needs of humans when seeking financial advice. A hybrid model is the best bet for the moment, and for the near future. Evidently, these digital natives are still seeking a human to collaborate with and gain valuable insight from.”