SOURCE: Spectrem Group

Spectrem Group

February 25, 2015 08:00 ET

Robo-Advisors Are Gaining Traction With Investors, but Only 6 Percent of Affluent Use Them Now

CHICAGO, IL--(Marketwired - Feb 25, 2015) - Affordable robo-advisor services continue to gain traction among investors, particularly young investors, but only 6 percent of all affluent investors are currently utilizing a robo-advisor service, according to "Wealthy Investors and Their Perceptions of Virtual Advisors," the latest report from Spectrem Group (www.spectrem.com).

The value of face-to-face interaction between investor and advisor is being tested by the advent of the "robo-advisor," an entirely technology-based platform that automates the process of investing advice, often based on answers to a questionnaire about the investor's age, risk tolerance and net worth.

Some investors are also using investment advisor services that provide contact with a human solely through the use of video-chat capabilities such as Skype or FaceTime. These investors are similarly studied in the Spectrem report.

Key findings in the report include:

  • Investors who use robo-advisors are more likely to consider themselves "advisor-dependent" -- relying on the advisor to make most or all of their investment decisions -- than investors who do not use technology-based advisors.
  • While only 6 percent of investors currently use a virtual advisor, 17 percent of investors under the age of 35 are employing a robo-advisor.
  • The greater the wealth of an investor, the more likely the investor is familiar with the concept of a "robo-advisor."

"The wealth management technology that makes robo-advisors a possibility is not going to disappear or slow down," says George H. Walper Jr., president of Spectrem Group. "But most affluent investors still want the services that only human interaction can provide, such as advice about the future. Advisors who don't take advantage of technology in some capacity run the risk of being left behind. These technology services are an asset, not a threat."

Additional information on Spectrem studies can be found at Spectrem.com and Spectrem's Millionaire Corner, including:

About Spectrem Group: Spectrem Group (www.spectrem.com) strategically analyzes its ongoing primary research with investors to assist financial providers and advisors in understanding the Voice of the Investor.

About Millionaire Corner: Spectrem's Millionaire Corner website (www.millionairecorner.com) provides information for investors about investors. With its Best Financial Advisors service, investors are able to search for financial and investment advisors to assist in growing their wealth.

Charts and deeper report insights available upon request.

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