Financial advisors remain a vital source of advice for most investors, according to the first-quarter 2019 Wells Fargo/Gallup Investor and Retirement Optimism Index survey.

The survey — which comprised interviews with 1,029 U.S. adults with $10,000 or more invested in stocks, bonds or mutual funds — found that 84% of investors say that financial advisors will always be needed and will not be replaced by automated investing technology.

Wayne Badorf, head of intermediary distribution at Wells Fargo Asset Management, told ThinkAdvisor that these investors see it as an “important relationship.”

“While they recognize automated investing, they want a person involved and they want primarily the person involved,” Badorf said. “That creates a tremendous amount of confirmation and optimism for the industry in general.”

Investors expressed an openness to technology playing a role in their financial planning — just not at the expense of working with an advisor, the survey found.

Only 24% say they currently use automated investing technology for their own investing, without the assistance of an advisor. But 56% say they would prefer working with a financial advisor who uses automated investing tools on their behalf.

Another finding from the survey that Badorf found particularly interesting was the number of survey respondents that either work with or want to work with an advisor.

In total, 78% of investors either work with a financial advisor (56%) or would like to work with one (22%), suggesting that investors continue to want guidance from advisors when saving, investing and preparing for retirement.

“There’s a marketplace where firms need to figure out how do they connect to that 22% of the population that says ‘I see the need, I want to work with someone, but for some reason I don’t have that relationship today,’” Badorf told ThinkAdvisor.

How do the advisors bridge that gap?

“I really think that’s an opportunity for firms to really help equip their advisors to meeting that group of individuals,” Badorf added.

One major way to bridge the gap, according to Badorf, could be to reach out and have conversations with young investors.

“The potential demand for the financial advisor is [from] this next generation,” Badorf told ThinkAdvisor. “Part of that 22% that’s underserved — who’s saying I want a relationship but don’t have one — is [largely] coming from these younger demographics.”

The survey asked respondents if they had a personal financial advisor that works with them on financial decision making. Of the 18-49 year old respondents, 54% said they did not have an advisor. When asked if they would like to have an advisor, 64% said they would.

When the 50- to 64-year-olds were asked if they have an advisor, a third (33%) said no, but over half (56%) of that group said they’d like an advisor.

“When we began to see where the underserved market is, we see it come out in that 18-49 and 50- 64-year-olds,” Badorf told ThinkAdvisor.

The simplest place to start reaching younger clients, according to Badorf, is via their parents.

“If you’re working with individuals who are over the age of 65, how do you get introduced to their children?” he said.

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