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?