Advisors have moved past the denial stage, and are realizing the dominance of digital advice. Nine in 10 RIAs believe robo advisors will become more prevalent in financial services over the next two years, according to new Scottrade Advisor Services research cited by FierceFinanceIT. This is up from half of advisors a year ago. The publication says the research could be a sign that advisors’ attitudes towards digital advice are changing; in fact, nearly half said they offer or plan to offer a robo advice solution in the next year. “Robo-advisors can benefit certain investors by providing more choice, and RIAs could potentially add more scale to their business by leveraging these services," said Brian Stimpfl, senior vice president and head of Scottrade Advisor Services.
Investors Prefer Robo-Human Hybrids
When asked to choose between three types of managed accounts – a low-cost, digital only solution; a medium-priced solution that combines automatic rebalancing and human guidance; or a premium, advisor-driven account – investors were more likely to pick the digital hybrid model, according to E*TRADE’s quarterly tracking study of experienced investors. The preference was more pronounced among millennial and Gen X investors, seeming to validate the popular sales pitch from wealth management technology vendors. “The idea that younger investors will only gravitate towards the cheapest solution is a myth,” said Kunal Vaed, the senior vice president of E*TRADE’s digital channels. “While intuitive and insightful digital tools are a necessity in catering to today’s investors, at the same time, investors seek human guidance. Investors want to be able to talk to a professional, especially during extreme market volatility.”
Contrary to popular belief, millennials are engaged in their finances. A recent iQuantifi survey of over 500 millennials (ages 21 to 35) found that 70 percent of them are planning to invest in a financial product in the next year. But that purchase may be with another institution, since more than a third of millennials said they plan to switch financial providers. What are they looking for? More guidance and financial planning tools, according to three-fourths of respondents. And 81 percent say they would use an app or online tool that provided comprehensive advice if it were offered.
Where Women Make More Than Men
There are currently only seven jobs in the United States where women make more money than men, and financial advisor isn't one of them. According to the U.S. Census Bureau, out of 300 jobs the goverment compared, women out-earned men as: tour and travel guides; musicians, singers and related workers; transportation, storage and distribution managers; dietitians and nutritionists; residential advisors; wholesale and retail buyers, excluding farm products and counselors. The financial services sector continues to lag behind in gender pay equity, Money.com reports. Financial specialists, clerks, managers and personal financial advisors all landed on the bottom of a pay comparison list of men and women. Female financial advisors make 63.1 percent of what men make, according to Census Bureau data.