Robo financial advising on the rise, but gen Xers still prefer the human touch

Source: Generations Apart

Despite the growing popularity of online financial advice (known as robo-advisors), personal relationships with human advisors remain important for many Americans, according to Generations Apart – a recent study from Allianz Life Insurance Company of North America (Allianz Life) on how baby boomers and Generation X approach their financial futures.

When asked about engaging robo-advisors, nearly seven in 10 (69%) from both generations indicated they “don’t really trust online advice, making personal relationships more important.” More than three-quarters (76%) believe “there’s so much selling online that it’s hard to trust the financial advice.”

Additionally, while more than a third (35%) of respondents said they have some interest in working with a robo-advisor (46% Gen X, 24% boomers), only 10% said they would be comfortable having their relationship with their financial advisor exist entirely online.

“Robo-advisors are generating a lot of buzz in the personal finance world, but when it comes to fully relying on them, both Gen Xers and boomers hesitate and instead recognize the value of a real person giving personalized advice,” said Katie Libbe, Allianz Life vice president of Consumer Insights. “Both generations say they’re concerned about retirement, so it’s crucial that they have access to financial professionals who address their specific needs beyond asset allocation and accumulation, and shift their recommendations as personal circumstances change.”

More Time Online

The Generations Apart study revealed that more than half (57%) of both generations spend about 1-3 hours a day online outside of work, making the Internet a likely place to seek financial information. In fact, 40% of respondents said they “regularly” visit financial websites, with 13% making daily visits and 22% doing some trading/investing online. For some, this increase in online engagement affects their opinion of professional financial help, with 42% of respondents agreeing that “there’s nothing a financial advisor can tell me that I can’t find out online.”

Despite this sentiment and interest in online financial assistance, when asked what the most valuable things a financial advisor currently does or could do for them, both generations cite support that would be difficult or impossible to obtain solely online via robo resources. This includes: “helping me plan, set and achieve long-term financial goals”; “making sure I have enough money to last as long as I live”; and “helping me understand the big picture of my money (spending, saving, and retirement).”

Added Libbe, “With more robust technology available today, people are getting more comfortable with some aspects of online financial planning, but Americans also still see the value of working with a trusted advisor to help them plan for retirement and shape their financial future.”

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