The latest Wells Fargo Affluent Investor survey has some good news for financial advisors but it comes with a caveat: Half of affluent and high net worth investors say they would never be comfortable working with a robo-advisor and 75% say a robo-advisor would never replace their financial advisor, but 50% say they’re likely to try one within the next five years, and 80% want 24-hour access to investment information.
Not surprisingly younger investors—in their 30s and 40s—were the mostly likely to try a robo-advisor, which the survey refers to as an Automatic Investment Advisory Specialist, or AIAS.
“Advisors need to realize that expectations about technology are not going away,” says Joseph Nadreau, managing director for innovation and strategy at Wells Fargo Advisors. “They need to look for ways to have technology complement and augment their relationships with clients. The most successful will embrace technology.”
The survey found that 61% of affluent investors, defined as having between $250,000 and $1 million in investable assets, have a financial advisor, while 67% of high net worth investors — those with more than $1 million assets — do. That suggests plenty of opportunity for advisors to expand their market. Altogether these two groups of investors have a median $450,000 invested in the market.
Among those investors who do have an advisor, 7 in 10 feel his or her advisor is as important to them as their doctor and almost all are satisfied with the quality of service they’re getting. “People who have advisors feel very loyal to their advisors,” says Nadreau.
Close to 90% say they want their advisor to do more than just invest their money. They want their advisor to be partner in financial planning, which presents another opportunity for advisors. “Investors ought to take that to heart” says Nadreau. “More and more want help with life goals, including estate planning. They have a very high degree of expectations.”
A key part of estate planning is the transfer of wealth to beneficiaries. While seven out of 10 affluent and high net worth investors – which we will now refer to as “affluent” investors – have taken steps to pass on their wealth to heirs, almost 30% have not, which represents another opportunity for advisors.