When it comes to technology, age 40 is a dividing line for financial advisors, a new survey suggests.
More than half of advisors under age 40 plan to incorporate robo-advisors into their practices, compared to less than 13 percent of advisors over the age of 40, according to a recent survey of more than 375 wealth managers by iCapital Networks.
Most advisors under age 40 are digital natives—millennials and younger members of Generation X who have adapted to rapid technological change and tend to feel more optimistic about a digitally driven future. In iCapital’s survey, more than three-quarters of advisors under 40 believed that technology would level the playing field across the wealth management industry in the next five years, compared to just 27 percent of advisors over the age of 40.
The younger advisors were also more confident that technology would obviate the need for portfolio management moving forward, making the advisor’s role more concentrated on client acquisition and service.
Older advisors, on the other hand, expressed pessimism regarding technology’s role: Less than 5 percent of the respondents over age 40 believed that technological interfaces could drive client loyality, and approximately 11 percent believed technology would meaningfully lower the cost of investment management.
None of the advisors surveyed—at any age—believed that robo-advisors would come to replace human advisors.
iCapital’s survey was fielded in fall 2018 among more than 375 advisory professionals, with 32.6 percent of the sample falling below age 40, and 67.4 percent of the sample aged 40 and above.