Clients are generally satisfied with and loyal to their financial advisors; however, a greater proportion of younger investors use online platforms than use financial advisors, based on a Vanguard survey released on Tuesday.
Nearly three-quarters (74%) of survey respondents with advisors said their advisors are worth every penny, and 44% felt their advisors provide high value, but that perception varied by age. Of those aged 55 or older, 52% felt their advisors provide high value, dropping to 36% for those aged 18 to 34.
More than one-third (35%) of younger investors with advisors agreed they don’t fully trust their advisors, compared to 20% of all respondents.
Older clients were also more loyal to their advisors than younger clients. Four in five (80%) of those aged 55 or older who had advisors said they would likely stay with their current advisors, compared to 64% of those aged 18 to 34 who had advisors.
Among the younger investors surveyed overall, 40% used online platforms for investment management, while 38% relied on financial advisors. In contrast, 70% of those over the age of 55 used financial advisors, with only 17% turning to online platforms.
Of investors who worked with robo-advisors, 43% said they trust the robo-advisor, but 46% would still consider switching to a human advisor in the future. The top reasons for switching to a human advisor included a perception of higher returns (32%), lack of confidence in their ability to manage their own investments (32%), and belief that a professional should manage their investments (24%).
The survey also found that communication frequency affects client financial optimism. Of those respondents who had advisors, nearly half who met with their advisors once a month or more (46%) were very or extremely optimistic about their financial futures compared to one-third of those who met with their advisors every few months (33%).
“Financial advisors will need to focus on building trust, maintaining regular communication, and emphasizing the value they provide in an increasingly digital world,” Mario Cianfarani, head of sales and distribution with Vanguard Investments Canada Inc., said in a release. “Doing so will enable them to serve both traditional and younger investors more effectively.”
The survey, conducted by Angus Reid Group in March 2024, included 1,307 respondents who had at least some investable assets, such as stocks, bonds, mutual funds and high-interest savings accounts. The results were weighted by age, gender, income and region.