Kevin McCormack, President, Pension Parameters

Kevin McCormack, President, Pension Parameters

In a follow-up of sorts to the recent Man vs. Machine posting, we apply some revealing findings to the question of investing preference—doing it online or consulting on the phone (or in person) with your financial advisor?

An interesting story written by Lydia Saad–headlined U.S. Investors Opt for Human Over Online Financial Advice—finds that “just one in three are very comfortable using online technology for investing.” Here are excerpts from the release:

“PRINCETON, NJ — Even as access to the Internet has become ubiquitous in the U.S. and data analytics is highly touted for use in finance, U.S. investors are more likely to have a dedicated financial adviser than to use a financial website for obtaining advice on investing or planning for their retirement, 44% vs. 20%.

“More investors also report using either a financial advisory firm that gives them access to live advice through a call center (35%) or a friend or family member (29%) to advise them than using a financial website.

“These findings are based on a Wells Fargo/Gallup Investor and Retirement Optimism Index survey conducted in late June and early July. The survey is based on a nationally representative sample of U.S. investors with $10,000 or more in stocks, bonds, mutual funds, or in a self-directed IRA or 401(k).

“Retirees, High-Value Investors Gravitate Toward Dedicated Financial Advisers

“Among U.S. investors, retirees and investors with $100,000 or more in invested assets are significantly more likely than their counterparts to use a dedicated financial adviser. Non-retirees are more likely than retirees to use financial websites or to rely on friends and family.

“Men and women are about equally likely to report using three of the four advice resources. The exception is financial websites, which men are about twice as likely as women to say they use, 25% vs. 14%. There is little difference across types of investors in the use of financial advisory firms, with about a third of each demographic group saying they use one.

“Part of what may be suppressing investors’ use of online financial resources is that less than a third of investors — 30% — say they are ‘very comfortable’ using online or mobile technology for their investing or financial advice needs. While another 27% are somewhat comfortable, 43% say they are not comfortable with this.

“There is a strong generational skew in these attitudes, with 66% of non-retirees indicating at least some level of comfort with online financial advice tools, compared with 35% of retirees. Additionally, men have a higher comfort level than women.

And while people may not always be the best judge of their own likelihood of adopting technology in the future, just one in four investors — 24% — say they expect to use online or mobile technology more in the next two to three years than they do currently.


“The most recent Wells Fargo/Gallup survey shows that the great majority of investors feel they need expert advice to help them invest in the stock market, and the desire for professional input would likely be greater when advice needed for other types of financial matters (such as planning for retirement, college expenses, and healthcare) is factored in. Accordingly, eight in 10 investors report that they do receive advice in some form, spanning the four sources of advice tested in the poll. And despite lots of buzz about online financial tools that allow users to submit their portfolios to computer algorithms, most investors still feel more comfortable involving a human, whether in the form of a dedicated personal adviser or a financial advisory firm that gives them access to live counselors in a call center.”