You are here: Home - Investing - Experienced Investor - News -

Demand for low-cost robo advice led by high earners

Written by: Paloma Kubiak
The demand for robo-advice rises among wealthier investors despite it being commonly thought of as a low-cost financial planning tool.

More than half (51%) of people earning between £45,000 and £70,000 would use robo-advice (automated financial advice rather than face-to-face contact) for their investments while just 30% of those on incomes under £15,000 would do the same.

According to research by advisory firm Deloitte, 15 million consumers would be willing to pay for automated advice and millennials are also looking to embrace the technology.

Of the 2,000 people surveyed, over two-fifths (43%) of 35 to 44-year-old workers with a pension would use robo-advice on pensions, as would a quarter (24%) for the 45 to 54-year-olds and a fifth (21%) of those aged 55 and above.

Also, 35% of defined contribution pension holders – more than three million people – would be willing to pay for robo-advice to invest their pension pots, with demand highest among those with the smallest pension pots (45%), many who can’t afford traditional advice.

However, Deloitte’s research identifies some key barriers in consumers’ willingness to use robo-advisers.

Gavin Norwood, insurance partner at Deloitte, said: “While robo-advice can help close the financial advice gap, financial literacy and trust also have to be increased significantly. The industry needs to communicate the benefits of robo-advice in a simple and engaging way, for example, how robo-advice works in a safe and secure manner, the lower costs and convenience of 24/7 availability. Only then will people become as comfortable with disclosing their financial information to a ‘machine’ as a human.

“To-date robo-advice has focussed on investments, but its potential extends far beyond and the future looks bright as affordable and convenient automated advice users embrace its potential.  In five to 10 years, we will probably not use the term ‘robo-advice’ as digital becomes the recognised channel.”

See’s Will robo-advice replace your financial adviser for more information.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

The essential Your Money guide to the April 2018 tax changes

As we head into the 2018/19 tax year, a number of key changes take place to existing policies while some new i...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co... Awards 2018

Now in their 21st year, our awards recognise the companies offering the best products and services to consumers

Money Tips of the Week

Read previous post:
Pretty couple pointing at feature around house
FTBs lose out on properties as deposits ‘too small’

First-time buyers are missing out on home deals despite having deposits of over 10%, according to Nottingham Building Society.