No, Your Client Won't Ditch You for a Robot: Vanguard Survey

Investors’ perceived value-add to annual performance was 5% for human advice and 3% for digital-only advice. Human advisors also provided three times the emotional support, compared with self-management of investments.

Both human- and digital-advised clients believe that their advisors add substantial financial value in helping them achieve their financial goals. To convert perceived financial value to dollar terms, the researchers used $1 million as the median financial goal of both human-advised and digital-advised clients. 

They found that human-advised clients perceived themselves as $160,000 closer to achieving their financial goals thanks to their financial advisors, versus $50,000 closer for digital-advised clients.

Digital advice holds its own in one regard. The study found that across all generations, wealth levels and advice-delivery types, clients think that human financial advisors should consider automation to outsource portfolio construction and functional tasks, such as account setup and consistent monitoring. 

This is good news for advisors, according to the researchers, because it will allow them to scale technology to their entire client base. They can then focus on delivering uniquely human skills that help clients achieve financial success and provide peace of mind. 

Costa and Henshaw said human advisors should leverage both automation and upskilling about emotional needs of clients to optimize their value, scale their practice and target the unmet needs of investors who are robo-advised and who would be willing to switch their business in the future.