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Will the Robots Take Over?

As more and more of our daily activities become digitised, computerised and dehumanised, what are the prospects for real people delivering financial advice? Will the robots take over completely, or will it be a mutually harmonious relationship between man and machine?

Research by Vanguard throws light on this topic. Authors Paulo Costa Ph.D, and Jane E. Henshaw surveyed 1,518 American investors with at least $100,000 who used an advice service, whether delivered by a human, a robot, or both. It should be mentioned that the US is further ahead in its delivery of 'robo-advice' services, and whilst a survey of UK investors may provide different results, the greater availability of robo-advice over the pond would suggest that attitudes may have developed further as a result of practical experience.

The survey looked at three key issues; What degree of loyalty did investors show to each different type of service, and how likely were they to switch from one to the other; what was the perceived value offered to investors by advice services, and did that perception differ depending on the method of delivery; and, which specific aspects of advice services did investors prefer to be delivered by humans, and which by technology?


In this area the survey results were clear - investors have a strong loyalty to their human advisers, but much less loyalty to robo-services. For investors who used a human adviser already, 93% said that they would choose a service that uses a human adviser in the future. In contrast, 88% of investors currently using a robo-service said that they would be willing to use a human advised service in future. This suggests that investors perceive real value in a human relationship that isn't present from a digital service.


So what was it that encouraged this high level of loyalty to human advisers? To answer this question, Vanguard broke down the value of advice into three areas; Portfolio value, Financial value, and Emotional value, the key features of which are shown below.

Portfolio value

The survey shows that investors believe that both their human and digital advisers add high financial value. Investors with human advisers estimated that their adviser added around 5% a year extra return to their portfolio, whilst robo-advised investors estimated extra returns of 3% a year - although the latter expected higher overall returns, probably due to robo-advised investors tending to be younger and more agressive with their investment approach. Nevertheless, both channels are perceived to add real value to investors.

Financial value

To address this area, the authors focused on investors perceptions of their progress towards their financial goals, and here the difference was much starker. Investors with human advisers felt that, on average, they were 16% nearer to achieving their financial goals as a result of working with an adviser, whereas the robo-advised put the figure at 5%. So in this area, human advisers clearly add significant value over their digital counterparts.

Emotional value

Perhaps unsurprisingly, it was in this area that human advisers had a clear and distinct advantage. When asked about their peace of mind as a result of working with an adviser, the authors demonstrated that a human adviser added a massive 56% to the score for an individual working without an adviser, whilst the robo-advised investors reported an increase of 12%. So whilst digital services do offer people emotional support, it is within a relationship with a human that this quality really shines.

The Report goes on to analyse the different aspects of financial advice services that investors value, and you can read the results for yourself at the link below. The authors make a strong case for advisers to develop their business offerings to make full use of technology to enhance their services, whilst having a clear focus on the emotional aspects of financial planning that can't readily be delivered by computers.

Our Strategy

This is very much in line with our own experiences when working with clients, and with our core long-term strategy. From the early days of our business in the 1980's we have understood the importance of great advice, based on a clear understanding of both the financial and emotional aspects of each client's circumstances, supported by leading technology and service delivery. It's a formula that has worked extremely well for us and our clients, and it's encouraging to learn from this in-depth study that our approach, whilst continually evolving, isn't going to change fundamentally any time soon.

Andy Jervis CFP


3rd August 2022

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