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Why are robo advisers attracting millennials?

Technical know-how and lower income are pushing millennials to depend on Robo Advisers for money management. 

Millennials, sometimes known as Digital Natives, are seeking to invest thanks to these growing FinTech options.

The first series of Robo Advisers hit the financial advisory scene in 2008. Since then, these automated investment services are rapidly gaining traction.

Unlike traditional methods of wealth management that depend on human interaction, Robo Advisers are online resources. Representing an automated aspect of emerging financial technology, their asset management relies on algorithms.

Robo Advisers - Compelo

Robo Advisers: wealth planners without a pulse

Robo Advisers represent user-friendly and relatively economic solutions for simple goals such as portfolio management. Since most tech savvy millennials have bank accounts that are dwarfed by the likes of Bill Gates’, their needs are also straightforward, and therefore don’t require help from a human consultant.

In fact, the Robo Adviser platform appears to be the key to unlocking a previously difficult to open millennial market. Before these automated financial tools, investment advice was doled out by a human adviser whose hefty fees disallowed handling the limited resources of younger individuals.

Now however, the ease by which Digital Natives wield smartphones, tablets, and computers renders interaction with another person unnecessary, and Robo Advisers are an ideal option.

Robo Advisers - Compelo

Although millennials are eager to utilise automated financial software, such services are available to anyone who isn’t afraid of getting their hands digitally dirty.

Even though their pros are significant, Robo Advisers aren’t yet capable of processing sophisticated needs further than portfolio management.

They lack the rapport and expertise of a human wealth manager, qualities that are necessary for aims such as saving for a first home, funding a child’s education, easing investment worries, estate planning, or preparing income during retirement.

Consulting with a knowledgeable professional on wealth allocation is the personal appeal that motivates most high net worth (HNW) individuals. Some have even fostered long-standing relationships with their financial advisors due to their varied economic needs.

Robo Advisers - Compelo

Officials haven’t yet imposed regulations on Robo Advisers, since they are still novel forms of FinTech. As in, there aren’t any definitive features that characterise them. Therefore, different companies may offer different solutions to their customers, and consumers need to be mindful of this point.

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