November 5 — In well less than a decade, robo advice is expected to play a significant part in shaping the investing landscape. A new report from San Francisco-based Charles Schwab, The Rist of Robo: Americans’ Perspectives and Predictions on the Use of Digital Advice, finds that almost 60 percent of U.S. investors expect to use robo advice in some capacity by 2025.
“Robo advice is the ultimate equalizer — it democratizes investing by improving the process and price,” says Cynthia Loh, Charles Schwab vice president of digital advice and innovation. “But along with all the benefits of automation, the desire to use a combination of technology and access to a professional when needed is clear — and that desire is consistent across age groups and types of investors,” she adds.
According to the report, people see a significant opportunity for robo advice to change the way they invest, and almost half (45 percent) see robo advice as the technology that will ultimately have the biggest impact on financial services. However, most do still want access to a human: 71 percent of those surveyed want a robo advisor that also allows them access to human advice, and this number climbs to 80 percent when considering millennials alone.
Moreover, it’s not just millennials who are looking to take advantage of robo advice. Nearly half of boomers (46 percent) who are currently using a robo advisor reported that robo advice is perfect for their life stage, and 45 percent of boomers expect to use a robo advisor by 2025.
Per the report, a current snapshot of U.S. robo advice users cuts across a broad range of investor types:
- 60 percent of current users are millennials
- Nearly a quarter of current users are Gen X
- More than half of robo users are female
- Current robo advice users are twice as likely to say managing their investments is extremely easy (compared to non-users)
The full report is available here.