- 20th Nov 2015
Robo-advice isn’t just for millennials
‘Robo-advice’ is a good contender for the financial services buzz word of 2015. But, anyone who uses the term, seems to have a different interpretation of what it actually means. For some companies, it’s a word they don’t like to be associated with, while others are firmly flying the flag for robo-advice. While it may be an exaggeration of the service some companies offer, it may be under-selling the service of others. But one defining characteristic of a robo-advice firm is the integration and utilisation of innovative technology into the process of investing money.
A common myth is that technology and innovation are associated with younger generations; those who have grown up in a digital environment. But that’s definitely not just the case. Perhaps younger generations are more likely to be the early adopters of new technology, but it’s fair to say there is a significant number of ‘generation x’ and ‘baby boomers’ now embracing the digital age. Think of all those parents on Facebook!
The point of technology and innovation isn’t to provide digitally-savvy people with more complex or multifaceted services, it’s to make things easier and quicker. For everyone. People want goods and services delivered to them in the most convenient and cost effective way possible and that desire transcends age.
At Wealth Horizon, our clients certainly break the stereotype of generation. While we have young savers – just beginning their investment journey – we also have more experienced investors and clients that have received financial advice in the past and decided to now try the online version.
The Office of National Statistics (ONS) produces statistics for internet use, broken down into age bands. Almost all adults up to the age of 54 used the internet in the first quarter of 2015. And this only drops a little, to around 9 in every 10 adults, when accounting for all ages.
Online investment advice – or robo-advice (or any other phrase you might like to use) – makes receiving financial advice quick, convenient and does so at a lower cost than it would ordinarily be available. It can reach larger audiences; not being so bound by proximity or high minimum investment requirements.
These are all characteristics of a service that appeal to anyone in the market for financial advice. Or anyone who just doesn’t have the time to manage their own portfolio of investments.
So while the name may initially seem off-putting for some, robo-advice provides a valuable service to an underserved market.
A service for the millennials? Absolutely. For everyone else? Just as much so.
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