Why the Future of Financial Advising Will Be Bionic
The so-called battle between human and robo-advisors is a red herring. The future needs both.
Rich Daly argues that the future of financial advice will require a hybrid approach – part human, part robot, in other words: bionic. Robo-advisors are the latest trend in the world of personal financial advisory, think Learnvest, achieving triple-digit growth last year. Many wealth firms are embracing robo-advisors because the younger generation is demanding it.
What we know
- U.S. retirement gap estimated at $14 trillion
- Millennials are set to inherit $30 trillion over the next three decades
- Less than two-thirds of Baby Boomers and about a quarter of Millennials use financial advisors today
As the focus of financial advice shifts strongly from investing to planning – good financial advice depends upon intellectual capital and an understanding of nuance that robots may overlook. People who have goals that require more than basic investing, personalized advice is still a necessity. The advantage of robo-advisors is that it sets a platform for young people into the investing world while humans support them as their financial lives become more complex. That will benefit the financial industry and individual investors who will make better investment decisions whether their advisor is a robot, a human or the likely bionic hybrid.
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