NEW YORK — As artificial intelligence becomes more commonplace for businesses looking to boost productivity while lowering costs, it’s expected that many traditional will have automated counterparts in the future. But just how tolerant you be with a computer being responsible for various facets of your life — particularly financial affairs? A new survey finds that 1 in 5 millennials would be comfortable with a robot managing their money and or investments.
The survey, put together by fund management company Global X, consisted of high net worth investors spread out across four generations; millennials (aged 21-39), generation X (40-54), baby boomers (55-73), and swing-era (74+).
Robo-advisors, or automated finance managers that take care of day-to-day investing and money management for clients, are a relatively new development on the financial scene, but they are being offered more and more frequently by asset managers and advisors. The general idea behind their emergence is that the modern investor wants a more hands off approach to investing. It also doesn’t hurt that younger generations are quickly becoming accustomed to technology and artificial intelligence being involved in pretty much every aspect of modern life.
With all that in mind, it makes sense that millennials are most comfortable with the idea of a robo-advisor. Besides the 19% of surveyed millennials, 11% of generation X respondents said they would be comfortable with a robot managing their finances, compared to a mere 3% of baby boomer and swing-era respondents.
The survey also revealed that millennials are the most likely generation to seek financial advice following a major life event. Millennials (32%) were found to be twice as likely as baby boomer (16%) or swing (14%) investors to seek out an advisor after getting married. Millennials (37%) were also three times as likely to consult a financial advisor after a large purchase compared to baby boomers (11%) and swing-era investors (10%). In fact, 65% of surveyed millennials said they would probably seek financial guidance on any amount of investable assets, up to $1 million.
All of this just goes to show that millennials don’t seem to be as confident in their financial knowledge and decision making as older generations. Though 75% of surveyed millennials identified themselves as financially knowledgable, that’s still the lowest percentage among all four surveyed generations. While this isn’t necessarily a bad thing, it does indicate that a more robust education system for financial matters may be advisable for young Americans growing up.
The differences in generational mindsets regarding financial advice is even more striking after one examines the responses of older respondents. Only 27% of baby boomers and 21% of the swing generation said they planned to meet with financial advisors more often following retirement.
“Millennials are a sought-after generation for advisors as they build their assets, but many believe they are only interested in robo-advisor services,” says Brian Diessner, head of sales at Global X, in a press release. “What this data tells, though, is that Millennials are more nuanced in their needs and desires. While some will turn to robos, many have an interest in working with a human advisor to navigate financial markets, and that they feel they need guidance from a seasoned professional.”
The full survey can be found here.