Millenials may want them, but baby boomers won’t – that’s the verdict of a senior financial advisor after a report was released suggesting that robo advisors actually offer better client interaction than their human equivalent.
Bill McElroy, senior financial advisor with Manulife Securities Incorporated, spoke out in reaction to a Capgemini Consulting report which suggested that advisors could learn a thing or two from their robotic colleagues when it comes to dealing with clients.
“I can see where this service may appeal to the millennial crowd as they seem to be more interested in looking at computer/phone screens and texting than actually speaking to people,” commented McElroy. “It’s sad, but for them this may be the answer. Like hand writing, the skill of social interaction in this generation seems to be disappearing.
“However, I deal primarily with successful baby boomers who grew up interacting with people, not computers. I do not think that many will go for this type of investing. Investing is very emotional and I do not think a computer will be able to react to or read a person’s feelings, in our lifetime anyway.”
According to the report, however, robo advisors are doing just that. It suggests that their simple interfaces, frequent calls to action, and the use of big data is actually offering clients a better and more tailored experience. It is also estimated that that the current $14 billion to $16 billion in assets managed by robos will climb to $1 trillion to $2 trillion within the next five years.
However, McElroy believes that computers will fall short when it comes to dealing with client emotions.
“I have had many conversations in the last few weeks with uneasy clients - they need this and it’s not something they can get from a computer,” he said. “I can see us offering this type of investment on our platform as an add-on but I do not see it as a threat to our business. What happens to the market when all the emotion is taken out of it?”
What do you think of robo advisors? Can they really surpass human financial advisors? Leave a comment with your thoughts.