Nearly every day, articles about “robo-advisors” and their potential impact appear in various financial news media. Results from a new LIMRA survey of financial professionals reveals nearly half view robo-advisors as having no real impact on the industry.
Unlike robot portrayals in science fiction, a robo-advisor is a service that provides automated investment advice. Clients provide their investment goals and risk tolerance and the robo-advisor uses algorithms to provide portfolio management advice, all without a human financial planner.
LIMRA surveyed more than 300 financial professionals from career and independent insurance agents/advisors to independent investment advisors. Nearly 7 in 10 career and independent insurance agents are not familiar with the capabilities of a robo-advisor. By contrast, 71% of independent investment advisors are familiar with them. This dichotomy is not surprising as robo-advisors are currently used only for investment management.
While investment advisors may be more familiar with robo-advisors, 8 in 10 are not leveraging them currently and have no plans to in the immediate future. Among insurance sales professionals, 9 in 10 are also not leveraging and have no immediate plans.
• SEE ALSO: Are robo-advisors winning? Time to play the ethics card
Even though robo-advisors are still fairly new to the industry, their potential could represent opportunity for forward-thinking financial professionals and a threat to complacent ones. The current users of robo-advisors tend to be young and more sophisticated about investments. To financial professionals, they also represent tomorrow’s clients. Financial professionals who include technology driven alternatives into their practice have a better chance of retaining these new investors.
Earlier LIMRA research noted how consumers want a seamless, omnichannel experience when they interact with financial services companies. Financial professionals who leverage robo-advisors as part of their practice can more effectively meet consumer demands and give themselves a competitive advantage.
About LIMRA: LIMRA, a worldwide research, learning and development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 64 countries. Visit LIMRA at www.limra.com.
Nearly every day, articles about “robo-advisors” and their potential impact appear in various financial news media. Results from a new LIMRA survey of financial professionals reveals nearly half view robo-advisors as having no real impact on the industry.
Unlike robot portrayals in science fiction, a robo-advisor is a service that provides automated investment advice. Clients provide their investment goals and risk tolerance and the robo-advisor uses algorithms to provide portfolio management advice, all without a human financial planner.
LIMRA surveyed more than 300 financial professionals from career and independent insurance agents/advisors to independent investment advisors. Nearly 7 in 10 career and independent insurance agents are not familiar with the capabilities of a robo-advisor. By contrast, 71% of independent investment advisors are familiar with them. This dichotomy is not surprising as robo-advisors are currently used only for investment management.
While investment advisors may be more familiar with robo-advisors, 8 in 10 are not leveraging them currently and have no plans to in the immediate future. Among insurance sales professionals, 9 in 10 are also not leveraging and have no immediate plans.
• SEE ALSO: Are robo-advisors winning? Time to play the ethics card
Even though robo-advisors are still fairly new to the industry, their potential could represent opportunity for forward-thinking financial professionals and a threat to complacent ones. The current users of robo-advisors tend to be young and more sophisticated about investments. To financial professionals, they also represent tomorrow’s clients. Financial professionals who include technology driven alternatives into their practice have a better chance of retaining these new investors.
Earlier LIMRA research noted how consumers want a seamless, omnichannel experience when they interact with financial services companies. Financial professionals who leverage robo-advisors as part of their practice can more effectively meet consumer demands and give themselves a competitive advantage.
About LIMRA: LIMRA, a worldwide research, learning and development organization, is the trusted source of industry knowledge, helping more than 850 insurance and financial services companies in 64 countries. Visit LIMRA at www.limra.com.
