In the report, titled The truth about Gen X and Gen Y, ING Direct found that contrary to common assumptions, Gen Y in fact prefers face-to-face advice over robo-advice.
“It’s refreshing to see that the more digitally-savvy younger Australians recognise the value of face-to-face financial advice,” said ING Direct head of third-party distribution, Mark Woolnough.
“This shows that while there is a place for online solutions, they should complement personal advice relationships and not be at their expense,” he said.
Mr Woolnough noted that the net wealth of Gen X and Gen Y currently sits at approximately $1.4 trillion.
“Coupled with an intergenerational wealth transfer of $2.4 trillion occurring during the next three decades, that’s a huge opportunity for advisers,” he said.
However, the report also found that only 5 per cent of Gen X and Gen Y currently have an adviser.
A key factor stopping Gen Y from seeking financial advice is the perception of high fees. According to the report, both generations expect to pay a maximum of $250 for comprehensive face-to-face advice.
On the other hand, a majority of Gen Y expect robo-advice to be free.
Comments (1)
Overseas experience shows that robo works extremely well as an implementation tool when paired with an upfront human relationship. You can't replace the basic human desire of wanting to engage with humans, but there is an expectation from Gen Y (and Gen X to a lesser extent) that a human fronted advice service will have a digital back end that provides all the benefits of robo-advice for the ongoing maintenance and service provision.
I also think the intergenerational wealth transfer figures are significantly inflated as they don't take into account the rising health and aged-care costs which will great eat into potential inheritances.