UK Investors Want Human Advisors, Not Automation, Survey Finds

Josh O'Neill

13 October 2017

Most UK-based investors want their portfolios to be managed by investment professionals, not algorithms, a study has found, delivering a jab to the side of digital advice at a time when the space is experiencing unabated growth.

While robo-advisors - automated programmes that use complex algorithms to determine asset allocation, manage funds and provide financial advice – have become a staple in money management in recent years, UK investors are yet to fully trust such platforms with their investments, according to a survey from , the asset management house.

Just 5 per cent of respondents have said portfolio construction should be executed purely through technology, with only 14 per cent suggesting that it takes a “leading role”.

“Clearly, for UK investors, advice from a human is still of paramount importance, and this is unlikely to change for some time,” said Alexander Barry, head of UK sales at Legg Mason. “However, as technology continues to develop and becomes ever more sophisticated, there is clearly scope for advisers to utilise robo-advice to offer a wider service to clients.”

The survey's findings chime with those of a recent study by Swiss research house MyPrivateBanking Research, which found that robo-advisors were largely unable to cater to the complex needs of wealth management clients.

Yet the market for automated advice is growing - rapidly.

By the end of 2020, it is estimated that more than $4 trillion will be managed by robo-advisors. This figure would account for more than half of the some $7 trillion in assets currently overseen by UK fund houses.

In the face of this, a third (34 per cent) have said that portfolio construction should be human led and supported by technology, while 22 per cent suggest it should only be carried out by humans, with no input from technology.

Legg Mason's Global Investment Survey, which assesses the views of 15,300 individuals globally, shows that nearly two-thirds (64 per cent) favour a human-led or human-only approach to financial planning.

“Even in countries around the globe, like the US, where robo-advice and automation in financial services has been around longer, human interaction in some form or another remains crucial to the majority of clients,” Barry added.