As we discussed in the video, “Understanding the value of human and robo-advice”, our research suggests that clients are unlikely to switch to a robo-advisor, while robo-advised investors are far more likely to consider switching to a human or hybrid service. So not only are robo-advice offerings not a threat to traditional advice businesses, but they could serve as a platform for advisors to grow their businesses through new clients that are open to switching from a digital service to a human delivered service or hybrid of the two.

The key to realising this opportunity is in understanding the specific elements of financial advice that investors value most from human advisors, as well as the things that robo-advisors do well and are valued highly by clients.

When we delved deeper into advised investor's preferences around the delivery of different tasks, we found investors generally prefer digital services for portfolio management and functional tasks. For example, managing taxes and capital gains, portfolio diversification and the organisation and ongoing management of different accounts are among the top tasks that investors said they would prefer to be handled through automation.

Our research suggests a strong preference among investors for many advice services to be performed by a human, and most of these preferences fall within the emotional and financial planning categories of our value framework. So the number one component for which human advisors are preferred over robo-advisors is, unsurprisingly, understanding the investor's needs and goals, with the development of a connection between advisor and investor also high on the priorities for human delivery.

Broadly speaking, investors made it clear that they value the assurance, the trust and the personal connection they receive with human advisors.

Human advisors are well appreciated by their clients who perceive significant added value from partnering with their advisor. Our research points to a number of actionable takeaways for advisors that want to fine tune their proposition and optimise their value-add for existing and potential clients. Foremost, advisors should be sure to highlight the emotional value they can add. As our research showed, this is the top differentiator for human advisors.

So you might want to consider if you effectively convey your long term commitment to partner with clients in helping them achieve their financial and life goals. If not, perhaps the marketing or other aspects of the business are in line for a review. Upskilling on ‘soft skills’ might also be appropriate, individually or as a team. Advisors can also thoughtfully review their existing client acquisition and onboarding processes with an eye towards attracting robo-advised investors who are willing to switch to a human advisor.

Robo-advice users expect a friction free experience. Make the business visible and easy to find so that a potential client can learn about the benefits of partnering with a trusted advisor. Ultimately, advisors should align their resources to most appropriately fit the business tasks where investors perceive they provide the greatest value. In other words, are the people in your business aligned to the emotional and financial value tasks that investors prefer to receive from a human?

Is technology assigned to portfolio tasks that can be automated? If not, it might be time to investigate tools that can improve efficiency and deliver maximum value to clients.