Will Robots Replace Human Financial Advisors? financial advisor

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Robo-advisors have had a meteoric rise in popularity since their debut in 2008 thanks to the support from millennials and Gen Z. Today, Robo-advisors manage $460 billion, with some analysts predicting it will become a $1.2 trillion industry by 2024.

Watch the video to find out why some investors believe it will never replace traditional human financial.

Since their debut in 2008, robo-advisors have had a meteoric rise in popularity. In 2020, they managed $460 billion, a 30% increase compared with 2019. Some analysts predict robo-advising will become a $1.2 trillion industry by 2024.

“Investors historically have had two options when it comes to managing their investments. They could do it themselves through something like an online broker or you can work with a financial advisor,” explained Brian Concannon, head of Digital Advisor at Vanguard. “Now, with the advent of robo-advisors, there’s a third option, and that’s to merge the benefits of professional money management and advice with the convenience of an all-digital application.”

Robo-advisors’ sudden rise to prominence was made possible due to massive interest and support from millennials and Gen Z. According to a recent survey by Vanguard, millennials were twice as likely as young baby boomers to consider using a robo-advisor for investments.

“I believe that there are things that technology or algorithms can do better than humans can,” said Taylor Crane, a robo-advisor customer. “And I have no problem trusting a software to do that.”

Skeptics do not expect robo-advisors to replace human advisors entirely in the near future.

“Clearly, there’s always going to be a human element that’s missing,” said Jason Snipe, chief investment officer at Odyssey Capital Advisors. “My problem always will be the emotional response. Take a situation like last year when we’re going through Covid-19 and markets are moving a lot, dramatically. … You can’t talk to the technology, right?”

To combat this, many robo-advisor companies including Betterment and Vanguard began providing the option of hybrid services that combine both human and digital advice.

“[Some] investors we see crave validation from a financial advisor,” said Concannon. “So for those investors, being able to pick up the phone and have a video conference with a financial advisor, have a discussion about their needs and wants goes an incredibly long way to providing them the peace of mind that they so desperately need.”

Time is on the side of the robo-advisory industry as the technology continues to improve and the younger generations accrue more wealth.

“I think some combination of the two probably is where we are headed for in the future,” said Snipe. “I think the robo space has room to grow. I think it will obviously modify and change and become even more sophisticated.”

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20 comments

Kohta Ito 25/09/2021 - 4:47 Chiều

AI will definitely replace Human Financial Advisors.

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Greg Munsey 25/09/2021 - 4:47 Chiều

Online investments and trading have really helped many people achieved FINANCIAL FREEDOM, although many also had losses due to lack of knowledge and self trading. I recommend Cecily Bullara for anyone who wishes to make huge profits from investing. She is selfless and reliable.

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Clinton Nguyen 25/09/2021 - 4:47 Chiều

If you graduate with just an undergrad degree in finance, it will not be of use, you have to have many certifications such as the CFA or CFP and licenses such as your securities licenses like the Series 7 or 66 in order to look more appealing in today's financial services market. Finance and Banking is where the money are, you just need to be able to adapt to this changing market.

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McZiggy De La Mcmuffin 25/09/2021 - 4:47 Chiều

Bubbles

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nobuddy 25/09/2021 - 4:47 Chiều

this is what how robots take over the world in the real world

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Sky 25/09/2021 - 4:47 Chiều

The big difference isn't the algorithms of each robo advisor between the investment firms but the firms themselves.

Companies, especially those that are publicly traded or starting up, exist to grow and make money for those who invest IN them. Vanguard is not publicly traded and its investors are the people who invest WITH them. Without this constant pressure to produce huge profits for investors, Vanguard is able to focus on the products and services that better serve their clients.

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Arthur Bukovetsky 25/09/2021 - 4:47 Chiều

4:46 – "… today Betterment has grown to be the largest independent robo-advisor in the market" – CNBC proceeds showing an article from 2016 from the official Betterment website

I am missing something?

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Alparslan Korkmaz 25/09/2021 - 4:47 Chiều

Nice video

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Jasc 25/09/2021 - 4:47 Chiều

Why waste money on robo and financial advisors? Just buy index fund bi-weekly. Both of them were buying index fund anyway. Why not doing it yourself

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La Ho 25/09/2021 - 4:47 Chiều

In the Sino-British joint statement in Hong Kong, the CCP said that it was an outdated contract that wastes paper. Hong Kong has become an ordinary city in China, so Hong Kong dollar foreign exchange has also been completely controlled. The Sino-US Joint Communiqué must also become waste paper. If the United States does not wake up and thinks about interests, it will cause the entire United States to collapse because of interests. See what happened to Jack Ma? Can American businessmen escape? Can the American media businessmen who make money with the CCP finally escape?

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SBM ABU SAYeD RANA BGD 25/09/2021 - 4:47 Chiều

Thank You

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DanielKim HJ 25/09/2021 - 4:47 Chiều

Yes and robots will replace the government. That’s how democracy ends.

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El Haddad 25/09/2021 - 4:47 Chiều

Who cares that robo advisors will replace humans at the end consumers benefit more

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Kar Man Ho 25/09/2021 - 4:47 Chiều

Survellince cybersecurity that's most concern for the investor and consumer the confidence between human and robot interaction

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Grand Bay Central 25/09/2021 - 4:47 Chiều

Missing emotion element😢

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Sanjeev ghosh 25/09/2021 - 4:47 Chiều

Those who have the data of all these will make more money that any other 😂😂 others just providing them information I don't think they will out perform the best investors who has experienced all sorts of things 🙏

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Fadli Muhammad 25/09/2021 - 4:47 Chiều

Answer yes guys more advanced robotics can plan 1000 year's action acknowledge.

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Luis Robles 25/09/2021 - 4:47 Chiều

I prefer to invest by myself. Don’t trust other humans and don’t trust robo advisors either.

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Pankaj Doharey 25/09/2021 - 4:47 Chiều

Haha, i dont buy there will be a human element in Future, Millenials dont like to think about these things or have human interactions they prefer spending their time on other things while bots make money for them.

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bugaljuice 25/09/2021 - 4:47 Chiều

remember. people will die and the generation will replace the previous one. Robo advisors will be the future and GenZ and their kids will care less about conversations with human beings.

Reply

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