A generation apparently weaned on smartphones, gaming and virtual reality still wants to look their investment advisers in the eye.
According to Global Data’s recent UK investors survey, face-to-face communication is essential when arranging the buying and selling of their investments. As much as 95% of the services millennials use for wealth management activities involve real human interaction.
In contrast, only 5% are conducted solely through robo-advisors.
“Pigeonholing the next generation into a digital chamber is the wrong way to view millennials,” said Sergel Woldemichael, wealth management analyst at Global Data.
“Mobile investment apps are unable to cater to the emotional needs of humans when seeking financial advice. A hybrid model is the best bet for the moment, and for the near future. Evidently, these digital natives are still seeking a human to collaborate with and gain valuable insight from.”
The most popular service required is for an independent financial adviser (37%), followed by a financial planner connected to the respondent’s main bank (27%) and the capability to “do-it-yourself” via an investment company.
The survey’s conclusions might surprise traditional wealth managers who are under pressure to adjust their models to compete with fintech start-ups eager to disrupt an industry with a conservative, intimidating and fusty reputation.
Nevertheless, robo-advisors are gaining traction, including in Asia where entrepreneurs, banks and distributors have identified their potential for the region’s growing mass market of affluent investors.
