The Lowdown on Robo-Advisors…

Share

While the trend toward digital investing and advice appears unstoppable, investors continue to have mixed feelings about the robo-investing movement. Is it right for you?

The trend toward online investing and advisory services, also known as robo-investing and robo-advice is gaining momentum, but industry participants are struggling to get a handle on how retail investors, like you and me view and/or use robo-services to conduct their financial affairs.

Recent research conducted by major asset management firms has gleaned insight, yet often their findings turn up contradictory information. For instance, one study conducted by State Street Center for Applied Research found that 65% of retail investors believe that technology will do a better job at meeting their needs than human advisors. Other research conducted by Allianz Life®, which focused on generational approaches to investing and managing finances, revealed more complex attitudes.

Case in point: When baby boomers and Generation Xers were asked about using robo-advisors, a significant majority (69%) from both demographic groups said they “don’t really trust online advice.” Further, 76% stated that “there is so much selling online that it’s hard to trust the financial advice.”

The same study revealed that while more than a third of respondents expressed some interest in working with a robo-advisor, just one in 10 would be comfortable having a relationship with an advisor that existed solely online.

Yet as technology evolves and financial information proliferates online, investors are spending more time on financial websites, with 40% saying they visit such sites regularly, 13% go to financial sites daily, and 22% do some trading online. Among this group there appears to be a growing comfort level with the robo-experience, as 42% stated that “there’s nothing a financial advisor can tell me that I can’t find out online.”

Indeed, study after study on the emerging impact of digital advice is finding widespread ambivalence on the part of investors. On one hand, they are increasingly comfortable with getting their financial information and conducting more business through digital channels, while on the other, they still gravitate toward human relationships when dealing with complex “big picture” planning issues such as meeting their income needs in retirement and setting and managing other long-term financial goals.

Still in its infancy, the world of Web-based financial services will no doubt evolve and present exciting new developments in the future.

Michele_Photo_2014

Michele Bjorkgren, Financial Advisor
Compass Financial
p. 515.327.1020 x13
e. michele.bjorkgren@lpl.com
Securities Offered through FPL Financial
Member FINRA/SIPC

linkedIn

A little more about us:
Compass Financial is an independent, fee-based financial advisory firm in West Des Moines, Iowa. The Compass Team helps individuals and families develop an inspiring vision of their financial future and a realistic strategy.

By listening closely to our clients’ true needs, wants, hopes, desires and dreams we are able to combine Wealth Management and broad Financial Planning customized to each individual situation. It’s our goal to assist you in developing a personalized financial road map. The results from the process should include confidence that comes from planning. As we all know, life happens, sometimes ambushing the best laid plans. Accepting a new reality and adapting the financial plan is work we have done many times for our clients.

We also offer Financial Check Up or Second Opinion Services to those who want to enhance the service they are already receiving. This should lead to a better understanding of your current plans and give added confidence to your existing advisor relationship.

Sometimes life’s biggest challenges come in the form of transitions, retirement, marriage, health issues, divorce, unexpected loss, or even college savings. Our team at Compass has experienced many of these life transitions, it’s our hope to come alongside you and your family. These defining moments of life provide opportunities to implement financial strategies that can have long lasting impact. The first step is always the most difficult, but can also be the most rewarding. Please Contact Us today to receive your free, no obligation, one hour initial consultation!

Leave a Reply

Your email address will not be published. Required fields are marked *