Robo-advice is growing in recognition in Australia, most particularly amongst millennials, with older Australians providing a key opportunity for robo-advice providers, according to Investment Trends’ Robo-advice Report.
The Report, which surveyed over 10,000 online investors and 1,425 financial advisers in eight countries globally last year, found that 22 per cent of Australian online share investors were familiar with robo-advice services.
Only the US, where the bulk of innovation in robo-advice occurs, beat this with 39 per cent.
“The Australian financial services industry is ripe for disruption, as more and more investors take notice of digital advice solutions as an alternative to traditional advice models … Many Australian online investors tend to see themselves as early adopters of innovative solutions, so there is little surprise to see rising awareness and adoption of providers such as Acorns and Stockspot,” Investment Trends’ research director, Recep Peker, said.
While millennials were the biggest adopters of robo-advice, Peker said that there was potential for advice providers to tap into older consumers. Thirty-nine per cent of online share investors aged over 64 say they would consider using robo-advice, and 40 per cent of those aged 55 – 65 are keen to do so.
“While current robo-advice users tend to be younger and less wealthy, the demographic profile of those interested in using robo-advice closely matches the broader investor population, highlighting a key opportunity for robo-advice providers.
“Many Australians, young and old, want professional help to achieve their lifestyle goals and improve their financial situation, and many believe that robo-advice solutions can help them along this journey.”
Australians, especially older ones, still do not have full trust in robo-advice though and human support and guidance is needed for further adoption. The report found that 68 per cent of potential robo-advice users would trust a service’s recommendations only if follow-up customer support service was available.
“Building trust is vital to the success of robo-advice providers, and good customer service is the first step towards fostering trust … a multi-channel customer support is vital to get older investors over the line,” Peker said.