Nine in 10 human advised clients say they would not consider switching to digital advice while 88% of robo-advised clients would consider switching to a human adviser in the future, according to research.
Vanguard’s survey of 1,500 US investors who reported having a human adviser, digital service or both, found clients perceived human-delivered advice to add 5% more value to portfolios compared to digital advice which was perceived to add 3% more.
Vanguard Australia’s head of intermediary, Rebecca Pope, said: “It’s evident that clients are deriving significant value from advice and benefitting from the investment expertise and coaching that professional guidance can offer.
“From improving investment returns to achieving individual goals to emotional reassurance, advisers are here to help.”
The study found human and digital advice played different roles with clients preferring the emotional support of human advisers and the tax optimisation and diversification offered by digital advice.
While 84% of human-advised clients were satisfied with their advice arrangements, compared to 77% of those digitally advised, digitally-advised clients reported higher levels of time, willingness, and ability to manage their own investments.
Pope said understanding advice delivery preferences was crucial for Australian advisers, many of whom were time-poor and resource-constrained.
"If advisers can segment their business to understand what delivery method their clients prefer for what tasks, they can then use digital advice to automate particular services to help save time and costs, and ultimately bridge the gap between advice supply and demand”.
The study concluded advisers were not under threat from robo-services as client loyalty to human advisers is durable, and robo-advised clients were open to working with humans in the future.
“Overall, our results provide evidence that human advisers should leverage technology to scale their business while strengthening their uniquely human value proposition to address investors’ emotional needs,” the report said.