The WEALTHTECH Book

The Counter-intuitive Reality of Robo-Advice Demographics

By Sarah Stewart

Analyst, Strategic Insight

and Brett McDonald, CFA

Associate Consultant, Strategic Insight

Like many emergent technology-based consumer products and services, adoption is often assumed to lean towards younger generations. In the case of the delivery of online financial advice – which often falls under the robo-advice moniker – similar observations can be made about assumptions concerning generational product adoption rates and, in parallel, the budding reality of actual consumer adoption. While many emergent wealth management services have targeted accumulators and the millennial generation, robo-advice and the broader delivery of financial services online is certainly more than a millennial story.

Millennials as a Robo-Advice Target Client Segment

On paper, the millennial age cohort reflects many attractive attributes to be a target for emerging online advice services. From a timing perspective, the first-born of the generation are beginning to reach the age typical of entering the accumulation phase of the financial life cycle. This is the phase where incomes stabilize, families are started, homes are purchased and wealth begins to accumulate as human capital is transformed into financial wealth. This is also the phase where financial advice relationships form, as potential clients accumulate enough assets to garner the attention of, and meet the minimum asset thresholds for, more traditional wealth ...