As we noted in an August 7th blog post, BlackRock and Legg Mason both released global investor surveys that provide insight into motivations, biases and behaviors. While the surveys provide a variety of perspectives on investor optimism, risk approach and preparation for retirement, the use of technology emerges as a crucial theme. Investors discuss their opinions on how technology affects financial planning, and the extent to which online tools and apps are replacing human advisors. Despite lingering fears that technology and automation will replace millions of jobs, overall technology has played a positive role in helping people monitor their investments and reach their long-term financial goals. Here, are key survey takeaways related to technology:
BlackRock Investor Pulse
1. Technology is a great tool for personal finance and investing – According to BlackRock, online tools, apps and websites help investors feel more in control of their finances and encourage investing. Nearly half (41%) of respondents feel reassured in investment decisions, and 60% of respondents who monitor their investments online feel confident enough to invest more. Investors feel that online tools have helped them monitor retirement savings, increase pension contributions and increase savings. Legg Mason’s bar graph illustrates that Millennials and Gen-Xers use tools like websites and apps to keep track of personal finances, brokerage firms and fund managers.
Legg Mason’s Global Investor Survey
2. Majority of investors, including Millennials, favor human interaction – Legg Mason features three charts that discuss how investors feel about technology replacing advisors and customer service. Although respondents from both developed and emerging markets agree that online tools and apps are replacing the need to speak to an advisor, all respondents overwhelmingly prefer human expertise. Sixty percent of participants say that personal customer service is important to them and cannot be replaced with technology, a figure that is made up of 61% of Millennials and 71% of Baby Boomers. BlackRock’s survey states that 55% of investors would consider using robo advisors as a complement to human advisors. The findings also state that investors who use financial advisors are actually more willing to invest money in online transactions on average than non-advised investors. This finding supports that technology and personal advice services go hand in hand.
BlackRock’s Impact of Monitoring Investments Online
3. Emerging markets are ahead of the curve in technology use – People in emerging markets, particularly in Asian countries, have bypassed the use of desktop computers and fixed line connections in favor of accessing the internet via smartphones. Asian investors are the most mobile internet users, with 97% of users accessing the internet on the go in Taiwan, 96% of users in China and Singapore and 93% in Hong Kong. Latin Americans are close behind with 74%, well ahead of the 52% in the U.S. and 51% in America. As a result, Asian and Latin American investors are well ahead of European investors when it comes to planning their finances online. These findings may support their attitudes toward personalized customer service. Asian and Latin American investors are less likely than their U.S. and European counterparts to agree that personalized customer service is important and cannot be replaced with technology.
Legg Mason’s Findings on Personalized Customer Service