Investors worried about over-digitization as human touch remains indispensable

Most investors prefer to have a personal advisor over robo or digital solutions according to a survey conducted by Navigator Investment Services, an integrated investment platform under Singlife with Aviva, in partnership with EY.

“Advancing the art of counseling: Is counseling 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 relevant in a digital-first era.

Zennial investors as the new generation of wealth

In Asia, it is estimated that younger generations will inherit US$2.5 trillion (about S$3.36 trillion) of family wealth by 2030.

The new generation of wealth that includes both Millennials and Gen Z (Zennial investors) are the two largest generations, together they span 3.8 billion and make up 48% of the global population.

Having grown up with the internet and social media, they are able to arm themselves with the knowledge to learn and execute self-directed investment strategies.

As a result, these investors also require more comprehensive offers and customization in their investments.

The human touch remains indispensable

As wealth management becomes increasingly digital, investors have expressed concern about the lack of personal contact with their financial advisors.

While digital adoption lowers the cost to operate, it has also led to less efficient customization that comes with reduced human interaction.

Surprisingly, a greater share of Millennials (67%) prefer to maintain the human touch when it comes to advisory services despite being digital natives with a penchant for experimenting with new wealth platforms.

The report finds that 72% of investors prefer to retain the human touch when it comes to advisory services, consisting of advisor-led relationships (35%) and hybrid (a combination of both digital and physical) relationships (37%).

Most trusted sources of investment advice in 2022

Finishing of advisory crafts

According to the report, retail investors who are already in an advisor relationship showed strong confidence in the value they receive from their advisors.

Investors say that “trusting their advisors to act in their best interests” is the most important attribute for choosing a wealth management provider (34%).

This is followed by the ability to achieve high returns (21%), their commitment to ethical behavior (15%) and whether they were a reliable recommendation (15%).

Fees were the least important consideration (7%) suggesting that investors are willing to engage advisers.

The report also revealed that investors are more likely to engage advisers during major life events, such as starting a new business (61%), buying a home (60%) or inheriting money (59%).

Most trusted sources of investment advice in 2022

Akhil Doegar

Akhil Doegar, CEO, Navigator said,

“While the speed of digital adoption has increased, the desire for a greater human touch continues to grow in pace. Our report validates the value of advisory services as a highly trusted source of advice that cannot be easily replaced by self-directed, digital investment options.

These observations bode well for financial advisors, but to maintain that competitive edge, they must address the critical blind spots to truly improve their client value proposition.”

Han Wee Tan

Han Wee Tan, Partner, Ernst & Young Advisory said,

“Financial advisors play important and diverse roles in investors’ lives: as a consultant across life milestones; a confidant in good times and bad; and a sentinel that protects them from emotional investment decisions.

Advising requires commitment, hard work and communication to achieve not only superior returns, but most importantly, investor confidence.”