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A Millennial’s Decision: Robo-Advisor or Advisor?

  • By Nicole Anglace
  • |
  • August 9, 2016

For many people my age, stocks are a foreign concept. Unless their portfolio was set up by a parent or family member, chances are, it doesn’t exist. Oddly enough, many millennials, particularly females, hold an antiquated notion that investing in stocks is a characteristic of old, white men. A recent study also found that a large portion of the millennials generation see investing as a confusing venture. Given the recent proliferation of robo-advisors, perhaps these beliefs may be challenged and come to an end.

Young beautiful business woman using ipad tablet outdoor
Recently, a plethora of ETF-based financial technology platforms have emerged, allowing even low income earners to dabble in investments.

How does this affect Advisors like you?

If you want to take on Millennials as clients, you may want to act fast. Robo-advisors pose a significant threat to your market share, particularly within the millennial sector.

For a millennial seeking to invest without the aid of an advisor, options like Acorns with minimal fees are gaining significant traction. Those of us still under the age of 24, or those who are currently enrolled as students with access to an .edu email, can sign up and access this resource free of charge. Without these considerations, the fees are either $12 a year (for accounts under $5k) or 0.25% annually for accounts over $5k. 16 months after its launch, the app boasted over 700,000 accounts, ~75% of which were started by investors between the ages of 18 and 34.


Acorns is not the only fintech development causing a stir on the internet. Rumors suggest that a popular app may soon launch its own robo-advisor technology that will deliver an investing platform straight through its traditional mobile interface. Which platform? Snapchat.

If these rumors are in fact true, this may lead to a rapid increase of millennial investors. As millennials are more likely to trust recognizable brands, especially ones they regularly utilize, this could prove problematic for established firms.

Personally, I would be hesitant to invest my money through an app whose primary function is image sharing. However, this apprehension may not be shared by all members of my generation. As Snapchat is a well-known and trusted app in its current market, users will likely be more willing to trust it as the app begins to branch out into other areas.

Unfortunately, there appears to be a lack of information on this development. At this point, all we know is that the platform is rumored to be in development, and that the robos themselves will most likely allow users to invest in ETFs. However, regardless of the rumor’s validity, the trend exists and you should view it as a major sign of things to come.

Still, not all of us will like robo-advisors as they lack a personal touch, especially in times of need or family crisis. However, a large number of Millennials may begin to use these robo platforms for the sake of convenience. Currently, the research seems to suggest that Millennials may avoid robo-advisor platforms as they prefer face-to-face interaction. But, the fact that roughly 75% of Acorns’ users fall within a Millennial age grouping seems to counter this notion.

It’s All in the Timing

I suggest that the true hindrance is a feeling that we lack the knowledge to invest on our own. Should this be true, as the interfaces of the robo-advisors become more intuitive, these platforms will likely expose the traditional sector unless you aggressively seek to build relationships now.

Connecting with Millennials sooner rather than later will help you begin to develop the relationship and teach us what we need to know about investing!

Are you just getting by or are you getting better? Get started today!

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