Robo advisors may be a hot topic on the minds and lips of wealth management executives, but many clients still don't know what a robo is.
Only about one in five affluent clients say they are familiar with the new technology, according to a recent Wells Fargo survey of clients who had $250,000 or more in investable assets.
But that doesn't mean firms or advisors can ignore the technology.
Of those who have heard of robo advisors, one-third has already used one. And, not surprisingly, there is a big generational gap in attitudes toward the new technology, with 71% of clients in their 30s saying they would use a robo in the next five years compared with 27% of clients over age 60 who said the same.
But don't expect older clients to remain aloof of changing technology trends.
"There's a younger skew in all of that, but even folks who are 50-plus have changing expectations," says Joe Nadreau, head of Innovation and Strategy for Wells Fargo Advisors.
"You have a situation in our industry where the clients are having their digital expectations set outside of our industry," Nadreau says, pointing to the ways that new technologies have changed the way people buy clothes, get directions or hire a taxi.
It's a theme that many wealth management executives have picked up. For example, Mary Mack, head of Wells Fargo Advisors, recently told attendees at SIFMA's Private Client Conference that clients now want an Amazon experience.
Evolving expectations for technology go well beyond automated investment management, Nadreau says. Nearly 80% of affluent clients say it's important to them to have 24/7 access to their investment information, and 66% say it's important to be able to access information online about their accounts from multiple institutions in one place, according to the survey.
Nadreau says new technologies like robo advisors are best seen as a tool to enhance the work that advisors already do.
"There's definitely a place for that technology. But there's an emotional and psychological connection that you are not going to get through technology," he says.
As an example of work that only human advisors are capable of, he points to survey data showing that 29% of affluent clients have not taken steps to prepare to leave money to their kids or beneficiaries. One quarter say they feel uncomfortable talking with their family about their estate plans.
In addition, 29% clients say they regret not saving more and spending less while 15% say they regret not having enjoyed their money more.
"That's what a financial plan is meant to do, to make sure that you don't make unnecessary sacrifices through life," Nadreau says.
The survey was conducted online and polled 1,993 affluent investors between 30 and 75 years old.
Register or login for access to this item and much more
All On Wall Street content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access