Majority of Wealthy Investors Prefer a Mix of Human and Robo-Advice, According to Accenture Research
March 30 2017 - 8:33AM
Business Wire
Two-thirds (68 percent) 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 advisor or conventional
robo-advisory services (computer-generated advice and services
without human advisors) alone, according to research by Accenture
(NYSE: ACN).
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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 advisor’ debate has lost relevance for
investors and wealth and asset managers in North America,” said
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, customized 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 percent more
likely than those using only traditional or entirely automated
advisory services to say they proactively seek and receive
assistance on financial planning (64 percent versus 44 percent).
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 percent of respondents),
parents’ long-term financial needs (58 percent) and estate &
tax planning (42 percent).
Divided Feelings for Conventional Services
The survey found that investors don’t show a strong preference
for either dedicated human advisory or conventional robo-advisory
services. For instance:
- Thirty-eight percent of all investors
said they would never take the advice of their financial advisor
without first consulting another source. Nearly three-quarters (72
percent) of the wealthiest investors – those with a net worth of
more than $10 million – and more than half (56 percent) of those
with a net worth between $1.5 million and $10 million said they
believe that human advisors don’t provide sufficient value.
- Roughly half (54 percent) of investors
said they have received very good advice from their robo-advisor,
and 51 percent said they trust their robo-advisor completely and
would recommend it to family members or friends. However,
approximately the same number (52 percent) said they would never
take the advice of their robo-advisor without first consulting
another source.
Unmet Needs among Female Investors
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 percent vs. 75 percent) and talking to their
advisors more than once per year (44 percent vs. 58
percent).
In addition, female investors were more likely than male
investors – 62 percent vs. 54 percent – 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 percent vs. 28 percent).
“Women present an extraordinary growth opportunity for wealth
management firms, yet few firms have changed their advisory model
to meet women’s needs,” Thompson said. “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.”
Some other key findings of the report include:
- Nearly seven out of 10 millennials (69
percent) are amenable to receiving investment advice from Google,
Facebook, Amazon and other non-financial companies.
- Unlike baby boomers, millennials do not
believe that traditional human advisory services provide any
significant benefit over hybrid or conventional robo-advisory
services, with nearly two-thirds (64 percent) of millennials saying
they prefer hybrid advice, compared with only 28 percent of
baby boomers.
- Millennials are far less trusting of
human advisors than are baby boomers, being nearly three times as
likely to say they would never take the advice of their advisor
without consulting another source first (52 percent of millennials
vs. 18 percent of baby boomers).
- A large number of investors are
concerned about the cost of the advice they receive and are
confused about fees: 42 percent said their advisory service is too
expensive; 33 percent said they don’t know how much they pay for
the advice; and 38 percent said they don’t understand how they are
charged.
The full report can be downloaded at
https://www.accenture.com/us-en/insight-new-face-wealth-management
Methodology
Accenture designed and commissioned an online survey of 1,354
active investors in the U.S. (1,082) and Canada (272), which was
conducted in fall 2016. Respondents ranged in age from 21-70,
across various levels of net worth, and included a near-even split
by gender. The survey has an estimated margin of error of
+/- 3 percent.
About Accenture
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining unmatched
experience and specialized skills across more than 40 industries
and all business functions – underpinned by the world’s largest
delivery network – Accenture works at the intersection of business
and technology to help clients improve their performance and create
sustainable value for their stakeholders. With approximately
401,000 people serving clients in more than 120 countries,
Accenture drives innovation to improve the way the world works and
lives. Visit us at www.accenture.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20170330005686/en/
AccentureSean K. Conway,
+1-917-452-7116sean.k.conway@accenture.comorDavid Coleman,
+1-860-794-5520d.l.coleman@accenture.com
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