Why millennials are more inclined to use robos

Canadian millennials are twice as likely as older generations to use (or be willing to use) a robo-advisor, according to a survey from the Vancouver-based Angus Reid Institute.

Half of Canadian investors aged 18 to 35 (51%) say they would use a robo-advisor, compared with 23% of 35- to 54-year-olds and 9% of investors 55 and older, the poll found.

“Millennials are far less likely to use, or in the case of those who haven’t entered the investment market, want to use, one designated financial advisor than their older peers,” the Angus Reid Institute said in a release. “This younger group shows a higher inclination to purchase online, or to manage their investments themselves.”

Among those who use financial advisors, the survey recorded fairly high levels of satisfaction regarding advice and fees. Two-thirds (67%) said the fees they pay are good value for the investment advice they receive, and 64% said they had “a strong handle” on the fees they pay and what they’re for.

The survey also showed overall strong marks for trust in advisors and satisfaction with the amount of attention received. Those results varied depending on the client’s age, though.

While only one-third (32%) overall said their advisor doesn’t pay enough attention to their needs (31% for 35- to 54-year-olds; 24% for 55+), half (49%) of 18- to 34-year-olds felt this way.

Similarly, 36% of the youngest cohort said they don’t trust advisors to give sound, unbiased advice. Only 18% of the older age groups agreed.

Angus Reid says that low levels of satisfaction with the financial services industry among millennials could be “further motivating” the trend away from one-on-one relationships with advisors.

Read the survey results here.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.