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Americans Prefer the Benefits of a Human Advisor

Industry Trends and Research

A new study reveals that a strong majority of Americans say that technology should complement and not replace the services of a human financial advisor.

Examining what consumers think of technology in financial services and client perspectives on robo-advisors, the study commissioned by MDRT finds that 85% of Americans prefer working with a human financial advisor rather than a robo-advisor. And an even higher percentage (88%) state that technology should complement the services of a human advisor.

Only 5% of Americans believe financial planning should be managed entirely by technology-based tools and 36% strongly disagree that robo-advisors could completely replace the role of human financial advisors.  

But when it comes to hiring a financial professional or using technology, Millennials are split. Slightly more than half (52%) would trust a robo-advisor to effectively manage their financial plans, while the remaining 48% would not. Millennials were also twice as likely as some of their older counterparts (ages 45+) to agree that robo-advisors could completely replace the role of human advisors in financial planning (38% versus 17%).

Whether they currently use a financial advisor or not, nearly all respondents in each group agree it is important that advisors are both technologically savvy (95% each) and use updated technology-based tools in their practice (96% who have an advisor and 95% who don’t).

“Though robo-advisors have become more prevalent in the financial advisor industry, it’s vital to note that the majority of clients still desire human interaction and communication,” notes MDRT President Ross Vanderwolf. “This means that we, as financial professionals, should make every effort to cultivate client relationships in order to further promote the benefits of working with a human advisor.”

The Human Element

The top benefit respondents cite for working with a human financial advisor over a robo-advisor is the opportunity to build a trusting relationship (65%). This was followed by the high level of human interaction (58%) and ease of communication (52%).

In contrast, respondents cite cost (47%), response time (32%) and accuracy of assessments (31%) as their main concerns in working with a human financial advisor.

As to working with a robo-advisor over a human advisor, the study found the top benefit to be a minimized risk of human error (49%). The main concerns are lack of two-way conversational communication (58%), minimal human interaction (48%) and breach of data, including personal and financial, cited by 46% and 44% of respondents, respectively.  

Technologically Savvy  

Of those who currently work with an advisor, 94% say it’s important that advisors use software to model financial outcomes. What’s more, 80% believe cloud storage is a necessity for advisors to use to manage their business while 72% want an online platform for scheduling appointments.

Despite this finding, however, only 48% of those with a human financial advisor state that their advisor uses a software to model financial outcomes, 32% say their advisor uses an online platform for appointment scheduling and only 28% indicate their advisor uses cloud-based technology.

MDRT suggests that advisors who use software to model financial outcomes can mitigate concerns that their financial predictions might not be accurate or the risk of human error.

The survey was conducted online by the Harris Poll from Nov. 1-5, 2018, among 2,008 U.S. adults, among whom 771 currently work with a human financial advisor. 

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