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Investors' view on advice

Learn what clients value most about your offer as well as how to complement it with technology.

Overview

The trend toward automation in many industries, including financial advice, appears to be here to stay. But could digital 'robo-advice' offerings eliminate the need for traditional human advisors altogether? Vanguard went straight to investors to learn what they valued in advice delivery. We asked more than 1,500 advised investors about their perceptions regarding both types of financial advice—traditional and digital.

Our findings reveal a significant set of opportunities for traditional advisors:

Most investors desire a personal connection with a traditional financial advisor, even if they do not use one currently. This indicates strong potential for advisors to showcase their value and encourage digital-only investors to sign up as clients.
Investors recognize advantages to the simplicity of robo advisors that automate certain tasks, such as rebalancing and tax-loss harvesting. Traditional advisors can tout the specific automation their practice offers as a client benefit while enjoying the higher margins brought by improved effiency.

93%

Of investors with human advisors want to maintain their relationship with a financial advisor.¹

Loyalty to traditional advisors holds strong

If faced with leaving their current, traditional advisor, most clients would opt to work with another human financial advisor.

Chart depicting that 93% of clients prefer having a human advisor — **Note:** The sample in this figure included all interviewed investors who only had human advisors (1,175 in total).

Is robo-advice making financial advisors obsolete?

We examine the question through three key lenses. Watch to find out what they are.

Three key themes

Measuring client loyalty

Investor affinity for traditional financial advisors has proven resilient. Explore these research highlights quantifying how human advisors maintain a loyalty advantage with consumers of advice.
Valuing advice: The investor perspective

Investors acknowledge that they can make better progress toward financial goals when they have help. Learn what specific factors drive those investor beliefs.
Optimizing your practice

Here, the practical implications of our research come together. Read about how to align your offerings with the different types of value investors are seeking.

Have more questions? Contact a representative.

advisor_services@vanguard.com

Disclosures and footnotes

1 Paulo Costa and Jane Henshaw. 2022. Quantifying the investor's view on the value of human and robo-advice. Valley Forge, Pa.: The Vanguard Group.

Notes:

All investing is subject to risk, including the possible loss of the money you invest.

Diversification does not ensure a profit or protect against a loss.

Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment and could introduce portfolio tracking error into your accounts. There may also be unintended tax implications. We recommend that you carefully review the terms of consent and consult a tax advisor before taking action.