24 Oct 2019
Consumers Avoiding Robo-Advisors: 73% Prefer Face-to-Face Advice
A surge in so-called robo-advisors has not yet won consumers over. Despite an increase in the availability of robo services, research shows that nearly three-quarters of people still prefer face-to-face financial advice.
1,014 people were surveyed as part of financial advice firm Openwork’s recent study. It revealed that 73% of the focus group favoured face-to-face advice, even though robo-advice solutions offer cheaper options to customers.
Robo-advisors are automated digital platforms that use customer data and algorithms to provide financial solutions.
Despite the technologically advanced and mathematically driven nature of these platforms, consumers are still wary. Of those surveyed by Openwork, 71% expressed concerns that robo-advice might not be suitable for their financial needs.
Conversely, the study revealed that younger people were more open to receiving robo-advice. Nearly half of under-25s said they had no concerns regarding how appropriate this type of advice is for their needs.
Speaking on behalf of Openwork, director of learning and acquisition Claire Limon said:
“It is clear that robo-solutions are becoming increasingly advanced. However, consumers are still unsure it is right for their financial needs and do not feel that it can substitute human interaction, speaking with a qualified and experienced adviser.”
Robo-advice businesses came under fire from the FCA earlier this year due to a number of failings. The criticism centred mainly on suitability and disclosure, with some providers failing to offer adequate warnings about risk and also failing to suitably understand the customer’s needs.