Gauging the Shift Toward Robo-Advice

06/21/2016
technological hand with butterfly

Summary

Recent Grassroots℠ Research shows that slightly more than one-third of investors who use robo-advisors are considering switching to a financial advisor, indicating that automated advice isn't giving many clients the level of service they need.

One of the biggest trends in the asset-management industry in recent years has been the shift toward so-called "robo-advisors" – automated, online wealth-management services that provide algorithm-based portfolio-management advice to investors.

With robo-advisors gaining traction, GrassrootsSM Research recently conducted two surveys with investors, independent financial advisors and corporate financial advisors to gauge the overall impact of this trend on the private wealth-management industry.

In the first study, a majority of investors cited no or low annual fees as the biggest appeal of robo-advisors, while investors who prefer financial advisors say they are drawn to tailored services and human contact. Slightly more than one-third of investors who currently use robo-advisors are somewhat or highly likely to switch their investments to a financial advisor, which may indicate that robo-advisors are missing services that investors require for financial advice.

In the second study, independent and corporate-affiliated financial advisors reported that robo-advisors are having a minimal impact on their industry. However, as seen on the accompanying charts, financial advisors may be underestimating the level of interest in automated investment services from their clients.

While most financial advisors do not view robo-advisors as a viable option for their older clients, who want comprehensive and personalized financial-planning services, a few advisors expect the lower costs of robo-advice to spark higher levels of interest from their lower-net-worth and/or younger clients in the future.

Many Investors See the Appeal of Robo-Advisors …
In one survey, we asked investors how appealing they found computer-based automated portfolio advisement to be.

Many Investors See the Appeal

Source: GrassrootsSM Research as at February 2016.

But Most Advisors Think Clients Don't Want to 'Go Robo'
In another survey, we asked financial advisors how interested they think their clients are in automated services.

But Most Advisors Think Clients

Source: GrassrootsSM Research as at February 2016.


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Interest Growing in Self Driving Cars

07/21/2016
Interest Growing in Self Driving Cars

Summary

US consumers are getting more comfortable with the idea of self-driving cars, according to new Grassroots℠ research: 48% of sources surveyed are willing to pay extra for these high-tech highway features in the next vehicle they purchase.

To examine consumer interest in the current offerings of highway only self driving car technology, GrassrootsSM commissioned interviews with about 1,000 sources in the US who drive 100 or more highway miles per week. After watching a short promotional video, 71% of sources had a somewhat to very positive initial reaction to the concept of highway only self driving technology, while 15% had a somewhat to very negative initial reaction, and 14% had a neutral initial reaction. After watching the video, 78% were somewhat more comfortable to very comfortable with the idea of highway only self driving technology, while 22% were somewhat less to very uncomfortable.

If sources had access to the technology shown in the video, 47% would be somewhat to extremely likely to change their commute behavior, while 28% would be somewhat unlikely to not at all likely, and 25% would be moderately likely. If their commute afforded them a cheaper or larger home, 46% would be somewhat to extremely likely to move farther from their workplace, while 28% would be somewhat unlikely to not at all likely, and 26% would be moderately likely.

Regarding cost, 48% of sources are willing to pay extra for highway-only self-driving technology in the next vehicle they purchase, while 28% are not, and 24% were unsure. Among those willing to pay extra, 36% cited willingness to pay USD 2,000–USD 2,999, 32% cited USD 3,000–USD 3,999, and 20% cited USD 4,000–USD 4,999. Meanwhile, 33% of sources buy the latest products after others, 31% are reluctant to try new products, 28% typically are the first to buy new products and 8% typically do not buy new products.


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