From voice assistants to drone delivery, robots and automation are everywhere. And the financial services industry is not immune. Recently, robo-advisers have become increasingly popular, offering a convenient, tech-driven approach to investing.

A robo-adviser is any digital platform that provides automated investment and financial planning services conducted by an algorithm and without human supervision. Many robo-advisory platforms streamline processes by having investors input data about their financial situation, risk tolerance, and goals themselves and then letting the algorithm make investment decisions on their behalf. Robo-advisers are accessible and tend to be significantly less expensive than many human advisers.

Robo-advises are also popular — especially among younger investors. According to one survey, 20% of affluent millennials use robo-advisers, compared to only 9% of investors aged 47 to 54. This small (and growing) percentage of millennials also represents a large generation of newer investors, signaling their potential revenue streams for advisers. The robo-advisory market, currently valued at US$9.5 billion, is not going to stop growing anytime soon. Future projections anticipate a robo-advisory CAGR of 29%, worth US$72 billion, by 2032.

In a competitive market, robo-advisers create yet another competitor for human advisers. How can advisers stand out from robo-advisers? By leaning into the human characteristics that make them unique. Here are three ways to offer human services:

Build trust

Trust is the foundation of a strong client-adviser relationship. Unfortunately, one survey found that half of Americans are more likely to trust robo-advisers than traditional human advisers. Human advisers can combat the growing distrust by focusing on building relationships and showcasing their credibility and uniquely human skills. Robo-advisers are sterile — hands-off. Humans are adaptable and can showcase their skills and expertise by actively listening to clients and showing an in-depth knowledge of their needs.

Trust is demonstrated by understanding clients. Robo-advisers make product and investment recommendations based on algorithms and patterns. Many human advisers leverage the same technological resources, but they add a layer of human emotion and understanding to deliver personalised recommendations. Advisers can also adjust their offerings to meet client needs, such as adding tax or retirement planning tailored to each client’s circumstances.

A study from Vanguard found that 88% of clients using a robo-advisoer say they would be willing to switch to a human adviser. Conversely, only 4% of clients using a human adviser said they would switch to a robo-adviser. The lesson? Clients connect with human advisers, especially those who prioritise human connection and things like understanding their goals and active listening.

Teach and work through complex problems

Financial advisers do more than just manage investments. They also educate clients, help plan their futures, and coach them through major life stages. One of the top things clients look for in an adviser is skills and expertise to help them understand complex financial situations.

Robo-advisers may be able to link to relevant articles, but they can not teach like humans can. This is especially true for complex financial issues or questions. Advisers can provide context and personalised answers. They can tailor their education approach to each client’s needs.

Successful human advisers empower clients by answering their questions and explaining financial issues. They help simplify complex topics and demystify challenges that may seem overwhelming. By leaning into the educational side of advising and being a valuable resource for clients, advisers can stand out from robo-advisers.

Integrate human touch and tech efficiencies

In today’s technology-driven world, the decision between robo-advisers and human advisers is not black and white. Most clients do not want to rely completely on technology to reach their financial goals, but they also don’t want to rely totally on humans. The best solution: finding a balance between the human touch and the efficiencies of technology.

The wealth management experience for clients is often full of filling out repetitive forms, waiting to have questions answered, and not having an updated or accurate view of your investments. Integrations solve many of those issues and free up advisers’ time to answer questions and provide personalised financial advice. Integrations, such as combining forms, utilising digital signature services, and pulling data from multiple sources into financial planning software, enhance the client experience and provide the convenience of a robo-adviser with the personal touches of a human adviser. Human advisers who can prioritise their human characteristics while creating streamlined technology workflows can gain a strong competitive advantage. 

Docupace is a leader in cloud-based technology and digital storage for financial advisers. With dozens of integrations with leading platforms, Docupace makes it easy to open new accounts and spend more time with clients, delivering the real human connection they crave. Click here to learn more and schedule a discovery call.

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