Survey: Most consumers welcome robo-advice for banking, insurance and retirement services

Investors have rapidly embraced robo-advisers, investment platforms that rely on data and algorithms instead of flesh-and-blood finance professionals to administer portfolios. For the most complex financial decisions, though, most investors still want help from someone with a pulse.

A recent worldwide survey by Accenture found seven in 10 consumers would use robo-advisers. But 68% wanted human interaction to deal with complaints, and 61% preferred human advice for more complex products, like mortgages.

Robo-advisers work well with beginning investors, said Kristen LeClair, senior vice president at Kestra Financial, an Austin, Texas-based independent financial planning service. Someone in their 20s, who doesn’t have to think about supporting a family or legacy planning, can use robo-advisers to grow their wealth, LeClair said. But she would hesitate to trust algorithms with the reams of paperwork and decades of financial commitment that come with a mortgage.

“Even if ultimately [robo-advice] is a good solution for the client, the risk of someone getting into a transaction they don’t fully understand is concerning,” LeClair said.

What’s more, robo-advisers work to build optimal financial portfolios, and may not take into account the consumer’s social values, she said. Human financial planners can more easily steer their clients’ portfolios away from investing in companies they might find morally or ethically repugnant, LeClair said.

Some companies, like the Vanguard Group, use “hybrid” robo-adviser models, pairing algorithms with ready access to human financial planners. Vanguard’s Personal Advisor model, which launched in May 2015, has grown to more than $52 billion in assets under management through the end of 2016, said Frank Kolimago, head of the program.

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The advent of robo-advice helps make investment more accessible, Kolimago said, but he’s found Vanguard’s clients appreciate a human voice when faced with the kind of short-term surprises an algorithm alone may ignore.

“A lot of the value in conversation would be after an unexpected development in the market,” Kolimago said. A human adviser who knows a client’s individual sensitivities could talk them through their skittishness, whether in a phone call, an email or video chat.

Market upheaval aside, LeClair said algorithms come short when investors have children, get married, or divorce – all events which can affect portfolios and risk tolerance.

“Money is a very emotional thing,” LeClair said. “Having a financial adviser who can keep you off the ledge is very important.”

Would you trust your finances to algorithms?

72% in the U.S. said they would use entirely computer-generated support for banking

74% would use it for buying insurance

79% would use it for investment advice

Source:Accenture Consulting