Why some clients prefer robo-advisors to humans

Why some clients prefer robo-advisors to humans

Why some clients prefer robo-advisors to humans When it comes to financial planning, cost and delivery method are investors’ biggest concerns.

According to the latest research from LIMRA, whilst 45% of consumers claim that they lack financial knowledge, a third still see cost as a major hurdle from seeking advice. This has led to their preference for less expensive methods such as online platforms or robo-advice.

"This suggests that whilst consumers recognize the need for professional advice, not all are willing to pay top dollar for it. Some consumers are willing to forgo a dedicated financial professional for the sake of cost," the study explained, noting that there is a foreshadowing that consumer interests are shifting to term-based practice models over solo practices.

Meanwhile, trust still is amongst the top concerns of these clients, and they are more at ease with advice models they have confidence in.

LIMRA suggests that firms leverage this inclination by building relationships and using testimonials that promote trust and confidence.

Strong company reputation is also one of the major things clients look for when considering financial advice. This goes along their leaning to one-stop-shopping approach.

"Consumers value the ability to address a wide variety of financial issues at once rather than meeting with different financial professionals to address each need individually," the organization said.

For more of Wealth Professional's latest industry news, click here.

Related stories:
Investors: Advisors more popular than cash
Are advisors ready to embrace the robos?

More market talk: