ST. LOUIS--(BUSINESS WIRE)--More than nine in 10 registered investment advisors (RIAs) say robo-advisors will become more prevalent in financial services over the next two years, according to a recent study from Scottrade® Advisor Services.
This number is significantly higher than a similar study done in 2014*, in which only half of advisors polled stated it would become more prevalent in the next two years.
The study, which surveyed nearly 400 advisors about their clients and their businesses, also revealed advisors believe young, low-asset, high-risk investors are most interested in these services.
“Services like robo-advisors offer functionality that open up client choice, and could provide a great starting point for those entering the workforce and determining how to save for larger goals,” said Brian Stimpfl, senior vice president and head of Scottrade® Advisor Services. “As investment goals become more complex, the personalized guidance and advice RIAs offer is invaluable.”
While there is a wide variation of the role of robo-advisors in financial services – 61 percent of RIAs say robo-advisors will reduce the number of prospects – many see these online services as complementary, the study shows.
Forty percent of RIAs say they see robo-advisors as complementary to their business, while 23 percent say they view them as competition. RIAs at small companies – those advisors with $10 to $100 million in assets under management – are more likely than others to view robo-advisors as competition while those at large companies – those advisors with $500 million or more in assets under management – are more likely to feel it will complement their offering to clients.
“When it comes to RIAs and robos, advisors shouldn’t approach it as ‘us vs. them,’” Stimpfl said. “The relationship between RIAs and robo-advisors is complementary. Robo-advisors can benefit certain investors by providing more choice, and RIAs could potentially add more scale to their businesses by leveraging these services.”
RIAs are planning to do just that, the study shows. Nearly half of RIAs say they currently offer (28 percent) or plan to offer in the next year (19 percent) algorithmic-based investment advice. RIAs with $500 million or more in assets under management are more likely to offer these services than those with less than $500 million in assets.
For more information about the 2015 Scottrade® Advisor Services RIA Study, visit the Scottrade® Advisor Services RIA Study site at https://about.scottrade.com/media/research-findings/advisor-services-study.html.
* See 2014 Scottrade® Advisor Services RIA Study. Question wordings in both studies were identical; the 2015 study used a modified sample design.
Percentages may not always add up to 100 percent because of rounding or the acceptance of multiple responses.
About the 2015 Scottrade® Advisor Services RIA Study
The 2015 Scottrade® Advisor Services RIA Study was conducted Aug. 3-18, 2015, in collaboration with Harris Poll, an independent third-party research firm not affiliated with Scottrade Financial Services, Inc., its business units or subsidiaries. The 373 Registered Investment Advisors were aged 18 and older and were employed at firms managing at least $10 million in assets under management. This online survey was not based on a probability sample, and therefore, no estimate of theoretical sampling error can be calculated. For complete survey methodology, please contact email@example.com.
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About Scottrade® Advisor Services
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