Robo-advisors are gaining trust from investors who are now seeking a combination of high-tech and human advice. In High-Tech and High Touch: Investors Make the Case for Converging Automated Investing Platforms and Financial Planning, the Financial Planning Association (FPA) and Investopedia found that 73 percent of respondents were satisfied with their automated investing platforms (AIPs), compared to 75 percent with traditional financial advisors. The 31-40 age group showed the highest percentage of AIP usage at 11 percent. Not surprisingly, the 61+ age group had the least usage, at 4 percent.

The study also found that 58 percent of respondents were somewhat familiar with AIPs, while 18 percent have searched for an AIP. However, only 7 percent are currently using one, suggesting room for growth and deeper market penetration.

Conventional banks are listening to their customers and providing high-tech solutions in combination with human advice. In a pilot program launching in 2017, Wells Fargo Advisors is teaming up with FinTech firm SigFig to roll out a robo-advisor platform that targets “emerging investors.” By introducing a digital advisory offering alongside their network of over 15,000 traditional financial advisors, the nation’s second largest bank is addressing the migration to robo-advisors by millennials, while also providing traditional personal financial advisors. Rather than seeing automation as a threat to personal advising, Wells Fargo believes the two groups can seamlessly coexist to generate a two-pronged, cross-selling cumulative effect on the bottom line.

Coexistence or Cannibalism?

Traditional financial planners/advisors were still preferred over robo-advisors for financial services like estate, elder care, tax and healthcare planning. Financial services like investment planning, education funding and purchase financing services were tied. Financial advisors were still favored by 39 percent (versus 22 percent for robo-advisors) for investment planning services. However, another 39 percent of respondents preferred to use both. Advances in artificial intelligence and machine learning will inevitably broaden the depth and scope of robo-advisor services. While the data suggests that client acquisition is not a zero-sum game, it’s unclear just how much of the traditional financial advisor’s pipeline will be affected down the road.

Stubborn Baby Boomers

Robo-advisors are best suited for market-educated, self-directed and tech savvy investors. Not everyone embraces the technology, notably baby boomers who still prefer walking into brick-and-mortar bank branches to conduct business. Baby boomers are the most reluctant demographic to adopt FinTech, with trust being the major concern. However, this can be improved with stronger security and positive customer experiences.

With U.S. stock markets achieving new highs, the true stress test for robo-advisor clients will arise in the next bear market sell-off. Algorithms have no capacity for emotions, but investors do.

New technology like robo-advisors and AI are also playing a large role in reshaping FinTech hiring practices.