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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

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 robo.

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 some 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

Key themes

Three key themes

Loyalty to advisors

Loyalty to traditional advisors holds strong

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

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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 the consent and consult a tax advisor before taking action.