Most investors prefer having a personal adviser over robo or digital solutions, according to a new report from Navigator Investment Services, an integrated investment platform under Singlife with Aviva, in collaboration with Ernst & Young Advisory (EY) to provide an in-depth look into the global wealth management industry amid disruptive changes.
Titled "Advancing the Art of Advisory: Is Advisory Still Relevant?", the report examines key wealth trends that are redefining how financial advisors engage and serve their clients as well as how they can be of relevance in a digital-first era.
The report found that 72% of investors prefer to retain the human touch when it comes to advisory services, consisting of advisor-led relationships (35%) and hybrid "physical (a combination of both digital and physical)" relationships (37%).
This correlates with a 2022 CFA Institute study which found that 66% of retail investors consider their primary financial advisor as their most trusted source for wealth management advice, far surpassing online research (9%) and friends and family (7%).
Further highlights of the report include:
A New Generation of Young and Wealthy
In Asia, it is projected that younger generations will inherit $2.5trn (S$3.36trn) of family wealth by 2031.
With changes in preferences of the younger and digitally savvy generation and increasing competition from the self-serve digital wealth platforms, this calls to question how much of the pie is left for the advisory business.
Honing the Craft of Advisory
Investors say that "trust that their advisors will act in their best interests", is the top attribute for selecting a wealth management provider (34%).
This is followed by the ability to achieve high returns (21%), their commitment to ethical conduct (15%) and whether they were a trusted recommendation (15%). Fees were the least important consideration (7%) suggesting that investors are willing to engage advisors.
The report also revealed that investors are more likely to engage advisors during major life events, such as starting a new business (61%), buying a home (60%), or inheriting money (59%).
Akhil Doegar, chief executive of Navigator, said: "While the rate of digital adoption has been increasing, the desire for a greater human touch continues to grow in tandem. Our report validates the value of advisory services as a highly trusted source of advice that will not be easily replaced by self-directed, digital investment options. These observations bode well for financial advisors, but in order to sustain that competitive edge, they will need to address the critical blind spots to truly enhance client value propositions."
Han Wee Tan, partner, Ernst & Young Advisory, said: "We believe that the role of advisory remains paramount - particularly in times of uncertainty. Financial advisors play important and diverse roles in their investors' life: as a consultant across life milestones; a confidant during good and bad times; and a sentinel safeguarding them against emotional investment decisions.
Access the full report here
