Who would you trust more to invest your money: my kids on the left or the robots on the right?

Robots Can Crunch The Numbers, But Humans Are Better At Getting Customers to Take Action

In my latest report, I note that broad interest in automated investment services (AKA robo-advisors) remains low as 59% of US online adults are not interested in using robo-advisors and only 1% are currently using one.

Investors across all generations (not just Millennials) are increasingly seeing less value in face-to-face meetings with financial advisors, but in certain moments in the customer journey, human interaction and support are still needed. With the proliferation of digital advice platforms now available to provide asset allocation services and other recommendations, notably very few customers follow through on the digital advice and recommendations given to them.

Involving a human advisor during the “moment of truth” — the moment when customers are reviewing recommendations and deciding their next steps — improves the success rate substantially, as customers do tend to act based on the given advice. Firms that offer a timely, seamless handoff, from digital advice tools to a person-to-person interaction via phone or live chat, can provide the right level of affirmation and reassurance that customers need to “pull the trigger.”

Context And Timing Is Critical For Robots And Humans To Work Well Together

The wealth management firms that will therefore have an advantage are the ones that can blend human and digital touchpoints through collaborative advice. In this regard, full-service wealth management firms have one crucial advantage over direct firms: financial advisors who work with clients. Online collaborative advice enables investors to remain hands-on, aided by digital tools and guidance from an expert. And collaborative advice does not replace financial advisors — it complements those advisors. Collaborative advice can indeed raise the quality of advice, further driving additional client interactions.

Read more in my latest report about how the wealth management industry is transforming and the key actions that digital business strategy teams must take now to remain relevant.