High net worth investors trust humans over robots to make their investment decisions.
According to a survey by Minerva Lending, high net worth investors prefer to put their trust in the advice of independent financial advisers and their own judgement rather than computer based advisers.
A robo-advisor is an automated financial adviser (regulated in the UK by the FCA) with little-to-no human interaction that uses computer-based algorithms to suggest investment opportunities.
Minerva Lending found only 12% of the 1000 high net worth investors polled would trust a robo-advisor with their £50,000 or more investment. Whereas, 72% would take an IFA’s advice and judgement and 77% believe in their personal judgement to make an investment.
Stephen Baxter, Joint Managing Director at IFAs Robertson Baxter believes IFA’s should be encouraged by the results of the poll and added that the news has not really come as a surprise.
“The fact that nearly three quarters of high net worth investors would trust IFAs to make an investment decision over that of a Robo-Advisor is no great surprise” said Stephen, whose firm offers financial planning for high net worth individuals, charities and trusts in the region.
“The algorithm based approach is just not strong enough to compete with the personal relationships and interaction you need in finance. In our experience, high net worth investors want that personal contact with an IFA.
“The trust between an IFA and an existing client, family member or friend is highly ranked and is crucial to building successful, long-term relationships.
“Accountability is also key. You can’t hold a computer responsible for giving you bad advice. Both the IFA and the investor need to have confidence and trust in each other as well as themselves.
“The finance industry has always had concerns over robo-advice, and that might change in the future as technology and algorithms become more sophisticated, but, for now, humans are winning the war against robots in the investment world.”
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