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Investors Racing Ever Faster to Tech, but They Still Crave Human Advice: Schwab

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What You Need to Know

  • A fifth of investors surveyed believe that technology will fully manage their investment portfolio within a year.
  • Most investors agreed that there is a time for technology and a time for personal interaction.
  • Seventy-one percent of investors surveyed said technology is better for simple financial tasks, such as tracking expenses, but not for complex ones.

Four in 10 investors report that they used technology and digital tools to manage their finances more during the pandemic than ever before, and a third say they will continue to adopt technology at a faster rate going forward, Charles Schwab reported this week.

A fifth of investors believe that technology will fully manage their investment portfolio within a year, yet both new and seasoned investors say they will first turn to a financial advisor in times of uncertainty.

“The pandemic spurred rapid adoption of digital investing tools and technology, creating a unique opportunity for financial services companies to innovate how we serve customers and continue to build trust,” Neesha Hathi, Schwab’s chief digital officer, said in a statement. 

“The past year has reinforced that it’s not a question of meeting investors either digitally or in person — but combining the best of both to engage investors where and when they are looking to take action to manage their finances.” 

Logica Research conducted the online survey in June among a national sample of 1,000 U.S. investors 18 to 75 and a sample augment of 200 investors who began investing in 2020 or 2021, as well as a sample augment of 200 affluent investors. 

Tech First, but With Human Touch

Investors fall into three evenly divided groups when it comes to interacting with a financial institution, according to the survey. Thirty-seven percent prefer mostly using technology, 32% prefer mostly talking to a person and 31% prefer a combination of technology and in-person interactions on an ongoing basis. 

And although 54% of investors said it is possible to have a personal relationship with a financial company by interacting only through technology, most also agreed that there is a time for technology and a time for personal interaction. 

Seventy-one percent of investors surveyed said technology is better for simple, more transactional financial tasks, such as tracking expenses, but not for complex ones. A similar percentage said technology helps them reach their financial goals.

Seventy percent maintained that technology reduces the amount of time they spend managing their finances, and 65% said it gives them peace of mind concerning their finances.

“People are used to doing everything on their phones, and they expect managing their finances to be as easy as one-click online shopping or hailing a ride share,” said Zack Gipson, managing director of Schwab’s digital investor solutions, in the statement. 

“This sets a high bar for financial services companies to deliver easy, modern digital experiences that rival digitally native companies consumers trust, while differentiating through seamlessly integrating the best of technology and people.” 

Many survey participants said they will continue to conduct a range of financial activities digitally after the pandemic subsides, including using payment apps, online tools and apps to manage personal finances and virtual meetings to connect with a financial advisor. 

In contrast, more than half of respondents said it is very important to have access to a professional when they have questions, or need periodic or ongoing guidance or when the stock market has large gains or drops. 

In fact, 40% of investors said they would seek guidance from a financial advisor over any other resource — e.g,, financial websites, influencers, family/friends — if the stock market should drop significantly. Moreover, investors’ trust in a financial firm is also influenced by whether they have access to service in person, such as at a branch. 

A majority of investors in the survey also feel that human financial professionals deal best with complex tasks such as giving financial advice, providing customer support on account questions, understanding an investor’s entire financial situation, and creating a personalized investment portfolio or a financial plan. 

Generation Investor

During the uncertainty of the global pandemic and waves of market volatility in 2020, an influx of first-time investors got into the market. Schwab dubbed this cohort Generation Investor. The group accounts for 15% of U.S. stock market investors, according to previous Schwab data. 

The new study affirms that Gen I is a rapid adopter of technology compared with more seasoned investors — i.e., those who began investing before 2020. Seventy-four percent of these new investors think they can have a personal relationship with a financial company by interacting only through a mobile app or online, and they rely on technology to manage their finances in many ways. 

At the same time, Gen I prefers access to human financial professionals when it comes to other aspects of money management, feeling that professionals manage the following activities better than technology: 

  • Giving financial advice: 64%.
  • Understanding their entire financial situation: 63%.
  • Providing support on account questions: 61%.
  • Creating a personalized investment portfolio: 56%.
  • Answering questions about their financial situation: 56%.
  • Creating a financial plan: 55%.
  • Doing taxes: 54%.
  • Maximizing investment returns: 51%. 

And 83% of Gen I said that when finances become complex, such as when the stock market experiences a significant gain or downturn, they want access to a person to discuss their situation.