No, Millennials Don’t Prefer Machines: Report
Millennials might have less disdain for brick-and-mortar advisors than originally assumed, reports Business Insider. Citing new research by Salesforce.com, the news site says younger investors like to talk to FAs in person — and their preference for human contact is even stronger than that of older Generation Xers and baby boomers.
The report, which surveyed more than 1,000 adult U.S. investors, found that 47% of respondents aged 18-34 like to get financial advice face to face, compared with 36% of Generation Xers and 46% of boomers.
Nearly half of millennials questioned also said they like to communicate in person with their advisor before making investment decisions. Here, boomers felt even more strongly, with 54% preferring face-to-face guidance on such decisions. But only 39% of Gen X respondents expressed that preference.
Still, much of Salesforce’s 2015 Wealth Management for Connected Investors does come to many of the same conclusions as past research on millennials. Namely, it finds they are “not only putting pressure on financial advisors to use newer technologies in managing their money, but also pushing even Gen Xers and baby boomers toward more modern financial tools.”
But as the study makes clear, millennials are hardly ready to abandon human interaction completely. That, according to Business Insider, should be welcome news to big brokerages like UBS and Morgan Stanley, which are trying to “fend off a stampede of start-ups looking to chip into their prized wealth-management and asset-management businesses.”
On the other hand, the publication observes, robo-advisors like Betterment and Motif Investing that have “crashed the personal-finance space” might find the report disquieting. While raking in venture capital, many are still reportedly struggling to reach profitability — and analysts question whether the online advisory model is sustainable in the long term.