Robo-Advisors Pass Their 1st Big Test

MARLBOROUGH, Mass., Nov. 24, 2020 /PRNewswire/ -- A recent study released by DALBAR, Inc., entitled Investor Insights: COVID-19 and Robo Advice, sheds light on digital advice during the market turmoil of March and subsequent recovery. The study examined the experiences of 500 investors who engaged a robo-advisor in 2020, and found that investors were highly satisfied with their robo-advisor in the wake of the market crisis. 

The study found human advisors were more diligent in terms of client communication than robo-advisors, but less communication on the part of robo-advisors did nothing to diminish the trust and confidence of their investors. In fact, investors with robo-advisors reported a significant increase in both trust and confidence based on their experiences during the COVID-19 market crisis.

"Investors engaged with robo-advisors appear to be a 'show me' group, focused on higher returns and transparency around performance. They are not as concerned with the customer service aspects as those engaged with human advisors, who are held to a higher standard in some respects in terms of communication," said Cory Clark, Chief Marketing Officer at DALBAR.  "When you consider the profile of the average robo-investor, along with the fact that most believe their account balance is higher today because of the help of their robo-advisor, it makes sense that trust and confidence would surge as a result."

The study included investors engaged with firms such as Acorns, Ally, Betterment, Blooom, Ellevest, E*TRADE Core Portfolios, Fidelity Go, Financial Guard, SoFi, Personal Capital, Schwab Intelligent Portfolios, TD Ameritrade Essential Portfolios, Vanguard Personal Advisor Services and Wealthfront.

To learn more about Investor Insights: COVID-19 and Robo Advice, email Cory Clark at [email protected].

DALBAR, Inc. is the financial community's leading independent expert for evaluating, auditing and rating business practices, customer performance, and service. Launched in 1976, DALBAR has earned the recognition for consistent and unbiased evaluations of investment companies, registered investment advisers, insurance companies, broker/dealers, retirement plan providers and financial professionals. DALBAR has produced the Quantitative Analysis of Investor Behavior ("QAIB") study annually since 1994.

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SOURCE DALBAR, Inc.