Though news about robo-advisors is widespread, most financial advisors do not see these digital capabilities as a high priority, according to a study released Tuesday by Practical Perspectives. Likewise, a study released Tuesday by Allianz Life finds that few baby boomers and Gen Xers are confident about relying on tech-dominated financial advice.
In fact, just 7% of advisors polled consider robo-advice to be a high priority vs. other near-term business plans, according to Practical Perspectives. In addition, more than eight in 10 advisors are aware of robo-advice, but most do not have specific plans or schedules for the introduction of such capabilities.
Meanwhile, in Allianz Life’s “Generations Apart” report, nearly seven in 10, or 69%, of investors in both the Baby Boom demographic group and Generation X say they “don’t really trust online advice, making personal relationships more important.” Moreover, more than three-quarters, or 76%, agree that “there’s so much selling online that it’s hard to trust [this type of] financial advice.”
“Advisors are divided on the potential impact from robo-advice and want more clarity on whether it is a fad to be avoided or a long-term opportunity to be embraced,” said Howard Schneider, president of Practical Perspectives and the author of the group’s report, in a statement.
“Few advisors have made robo-advice a high priority, but many are curious to learn more about best practices and ways it could be used to attract new business and provide support to clients,” explained Schneider.
(The report is based on input collected online in January from more than 850 financial advisors and RIAs working with full-service, independent and other firms.)
According to Schneider, few advisors expect they will offer purely digital robo-advice solutions to clients. In fact, most expect personal service and contact to be part of any and all future offerings.
Plus, there appears to be no consensus on the robo-advice model that will become dominant in the field; many advisors anticipate that digital clients, in fact, “will ultimately migrate to full-service relationships,” he says.
RIAs account for most of the current practitioners offering robo-advice and are generally more receptive than other advisors to delivering digital advice, Practical Perspectives states.
The report also finds that Schwab, Vanguard, Betterment and Wealthfront are the online platforms most widely recognized by FAs; advisors are most concerned with the platforms’ new account opening and client service applications; and they view custodians and broker-dealers as preferred sources for robo-advice solutions.