Nearly 60 Percent of Americans Expect to Use Robo Advice by 2025 According to New Schwab Report

Charles Schwab has published a new report, “The Rise of Robo: Americans’ Perspectives and Predictions on the use of Digital Advice,” that examines people’s outlook on robo advice, its potential impact on how they invest, and its impact on the financial services industry overall. According to the report, the expectation that robo advice will play a significant role in shaping the investing landscape spans generations from millennials to baby boomers. At the same time, most investors also acknowledge the critical role human advisors will play into the future.

“Robo advice is the ultimate equalizer - it democratizes investing by improving the process and price,” says Cynthia Loh, Charles Schwab vice president of digital advice and innovation. “But along with all the benefits of automation, the desire to use a combination of technology and access to a professional when needed is clear – and that desire is consistent across age groups and types of investors.”

Key findings in the report include:

• People see a significant opportunity for robo advice to change the way they invest
  • Fifty-eight percent of Americans expect to use a robo advisor by 2025
  • Forty-five percent of Americans say robo advice will be the technology that ultimately has the biggest impact on financial services
• Most people still want a robo advisor that lets them interact with a person
  • Seventy-one percent of people want a robo advisor that also has access to human advice
  • Among millennials nearly 80 percent want a robo advisor that provides access to a person
• While millennials are the biggest power users today, baby boomers see significant appeal in robo advice
  • Nearly half of boomers using a robo-advisor (46 percent) say robo advice is perfect for their life stage
  • Forty-five percent of boomers overall expect to use a robo advisor by 2025
• The current snapshot of U.S. robo advisor users cuts across a broad range of investor types
  • Sixty percent of current U.S. robo users are millennials; nearly a quarter are gen X
  • More than half of robo users are female
  • Current robo advice users are two-times more likely to say managing their investments is extremely easy (compared to non-users)

The full report is available here.

About Schwab’s Consumer Digital Demands Survey

This report is based on an online study conducted by independent research firm Edelman Intelligence among 1,000 U.S. general population adults and 391 robo advisor users over the age of 18 between July 25, 2018 and July 31, 2018. General population respondents were weighted to be nationally representative based on most-recent U.S. Census data. Robo advisor users were collected based on mix of natural fallout among general population and oversample; users were identified through self-selection of at least one robo advisory platform. The study has a margin of error of ±3.1% at a 95% level of confidence.

About Charles Schwab

At Charles Schwab, we believe in the power of investing to help individuals create a better tomorrow. We have a history of challenging the status quo in our industry, innovating in ways that benefit investors and the advisors and employers who serve them, and championing our clients’ goals with passion and integrity. More information is available at www.aboutschwab.com. Follow us on Twitter, Facebook, YouTube and LinkedIn.

Disclosures

Through its operating subsidiaries, The Charles Schwab Corporation (NYSE: SCHW) provides a full range of securities brokerage, banking, money management and financial advisory services to individual investors and independent investment advisors. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC, www.sipc.org), and affiliates offer a complete range of investment services and products including an extensive selection of mutual funds; financial planning and investment advice; retirement plan and equity compensation plan services; compliance and trade monitoring solutions; referrals to independent fee-based investment advisors; and custodial, operational and trading support for independent, fee-based investment advisors through Schwab Advisor Services. Its banking subsidiary, Charles Schwab Bank (member FDIC and an Equal Housing Lender), provides banking and lending services and products. Edelman Intelligence is not affiliated with the Charles Schwab Corporation or its affiliates. More information is available at www.schwab.com and www.aboutschwab.com.

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© 2018 Charles Schwab & Co., Inc., All rights reserved. Member SIPC.

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