Forget those rumors that the growing robo-advisor technology will make financial advisors a moot point.
New research from global analytics firm Cerulli Associates suggests that technology innovations will help grow — not hinder —an advisor's business.
"Many assume that ongoing advances in technology will empower investors to handle their financial affairs without the assistance of traditional financial advisors," the report states.
Cerulli doesn't deny that technology innovations will transform how services are delivered.
However, the firm believes that there will be an ongoing, and potentially increasing, demand for personalized financial advice delivered by humans.
Scott Smith, director at Cerulli, points out how the data backs this claim up, too.
"Since 2010, there has been a continuous stream of developments in the technology available for investors to monitor and manage their portfolios. However, during this period the self-directed investor segment declined from 45% to 33% across all households," Smith said in a statement. "At the same time, those households Cerulli terms 'Advisor-Reliant', who regularly consult with a financial advisor, increased from 34% to 43%."
Despite all of the technological advances over the past four years, the number of self-directed investors (which Cerulli defines as households who use a variety of information sources to make their own investment decisions without the assistance of an investment professional or advisor) dropped by nearly 12 percentage points from 2010 to 2014, according to Cerulli.
Meanwhile the number of households that consult with an advisor, whether intermittently or regularly, jumped up by nearly 10% over the last four years.
