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Wealthy investors prefer mix of human and robo-advice, says survey

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Two-thirds (68 per cent) of emerging wealthy and high-net-worth investors in North America prefer “hybrid” investment advice – a combination of traditional advisory services and low-cost digital tools – over either a dedicated human adviser or conventional robo-advisory services alone, according to research by Accenture.

Based on a survey of more than 1,300 investors across income brackets and age groups in North America, the report, “The New Face of Wealth Management: In the Era of Hybrid Advice,” is part of a multi-year Accenture research initiative studying the needs of modern investors in the rapidly evolving landscape for financial advice.
 
“The ‘robo versus human adviser’ debate has lost relevance for investors and wealth and asset managers in North America,” says Kendra Thompson, managing director and head of Accenture’s global wealth management practice. “Our research clearly shows that investors want a combination of automated and human advisory services and that significant numbers of Millennials and Gen Xers have already turned to hybrid services.”
 
Overall, survey respondents were more likely to be satisfied with hybrid financial advisory services than with human-only or robo-only advisory services, in terms of ease of money management, digital tools, explanation of fees, customised services and low-cost products, according to the research. Digital technology – the web-based channels, tools and applications that enable a more-transparent and real-time understanding of a client’s investments – make hybrid models possible.
 
Investors using hybrid advice were nearly 50 per cent more likely than those using only traditional or entirely automated advisory services to say they proactively seek and receive assistance on financial planning (64 per cent versus 44 per cent). Investors who use hybrid advisory services are also among the most likely to have discussed family needs with their advisors—including children’s financial needs (cited by 67 per cent of respondents), parents’ long-term financial needs (58 per cent) and estate and tax planning (42 per cent).
 
The survey found that investors do not show a strong preference for either dedicated human advisory or conventional robo-advisory services.
 
Thirty-eight per cent of all investors said they would never take the advice of their financial adviser without first consulting another source. Nearly three-quarters (72 per cent) of the wealthiest investors – those with a net worth of more than USD10 million – and more than half (56 per cent) of those with a net worth between USD1.5 million and USD10 million said they believe that human advisers do not provide sufficient value.
 
Roughly half (54 per cent) of investors said they have received very good advice from their robo-adviser, and 51 per cent said they trust their robo-adviser completely and would recommend it to family members or friends. However, approximately the same number (52 per cent) said they would never take the advice of their robo-adviser without first consulting another source.
 
The research found that the needs of female investors differ from those of male investors and suggested that wealth management firms should adjust their service offerings accordingly. For instance, the female respondents were less likely than male respondents to have reported having a good understanding of their investments (61 per cent vs 75 per cent) and talking to their advisors more than once per year (44 per cent vs 58 per cent).
 
In addition, female investors were more likely than male investors – 62 per cent vs. 54 per cent – to say they prefer having the autonomy to pay based upon the service actually provided, even though dedicated financial advisors typically use fee structures based on a percentage of their assets under management. Female investors were also more likely than male investors to use dedicated-advisor services more than any other type of service (34 per cent vs 28 per cent).
 
“Women present an extraordinary growth opportunity for wealth management firms, yet few firms have changed their advisory model to meet women’s needs,” says Thompson. “Many women prefer a different approach to wealth management than the one many firms have traditionally offered. Empowered women want advisors to understand their ‘life pictures’ and ‘financial journeys’ rather than just their investments.”

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