Investors want both high-touch and hi-tech 'bionic' financial advice - study

Source: Financial Planning Association

A new study conducted by the Financial Planning Association® (FPA®), the leading membership association for Certified Financial Planner (CFP®) professionals, and Investopedia, the web's premier source of trusted financial content, reveals that today's investors require both high-tech and high-touch forms of advice to satisfy their increasingly complex financial needs.

The survey of Investopedia users in the U.S. proved that while investors are happy with using robo-advisors, they are more satisfied when using both a human advisor and an automated investing platform.
Sharper Insight. Smarter Investing.
Sharper Insight. Smarter Investing.

"The debate about whether robos or human advisors will win is moot. The future of financial advice is bionic - a powerful combination of both," comments David Siegel, CEO of Investopedia. "As investors get more comfortable with automated investing platforms, they're starting to demand both the low-cost benefits such platforms provide and the irreplaceably customized and high-touch approach of financial advisors."

The study, High-Tech and High-Touch: Investors Make the Case for Converging Automated Investing Platforms and Financial Planning, surveyed 2,002 residents of the United states over the age of 21 who have input in their household's investment decisions. The results reveal that investors are highly satisfied with using automated investing platforms -- 73 percent of respondents indicated they are satisfied or very satisfied with their primary automated investing platform. Similarly, 70 percent of investors primarily working with a financial planner/advisor are also satisfied or very satisfied.

Investors currently using an automated investing platform shed some light on what has made these services so attractive:

Eighty-one percent are confident that the automated platform they use supports their financial planning goals.
Volatility is worrisome - 40 percent are uncomfortable using an automated platform during times of volatility.
Seventy-five percent are satisfied with the current performance of their primary investing platform.

In particular, when it comes to particular areas of financial advice, respondents noted high degrees of satisfaction working with traditional financial planners/advisors due to the high-touch quality of the advice:

Seventy percent are satisfied with service related to estate planning.
Sixty-seven percent are satisfied with tax planning advice.
Sixty-six percent are satisfied with advice related to retirement.

When it came to the myriad of financial issues investors need to address, the preference of those surveyed was clearly for advice to be given by a financial planner/advisor, although many feel that quality advice can be accessed through an automated investing platform as well. In fact, 32 percent of respondents would use a financial planner/advisor for tax planning and 39 percent would use either for investment planning.

"There is an opportunity for financial planners/advisors, especially those who are CFP® professionals, and automated investing platforms to collaborate for the benefit of the client," says 2016 FPA President Pamela Sandy, CFP®. "Technology is rapidly changing the way people invest and manage their finances, but clearly investors value the high-touch financial advice afforded by professionals. Those investors who utilize the benefits of technology and maintain a face-to- face relationship with a qualified financial planner, like a CFP® professional, will be best positioned to meet their financial goals and achieve financial security."

The survey was conducted between August 25 and September 14, 2016.

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