Online Advice Complements Human Touch

April 11, 2001 ( - New research suggests that users of online financial advice are more likely to use human advisors, and are likely to use them more frequently, than other consumers.

The report, Online Advice Complements Human Advisors, from Forrester Research suggests that those individuals are more likely to take an active interest in all aspects of their financial lives – and that online advice is more likely to complement than to co-opt the need for human counsel.

Extinction distinctions

The report notes that the emergence of online financial advice is unlikely to make human advisors “extinct”, noting that:

  • ATMs didn’t replace tellers
  • Interactive Voice Response didn’t eliminate call centers

Rather, the report suggests that most consumers are not self-directed enough to rely solely on online counsel. 

Forrester reports that while consumers will turn to technology for simpler decisions, such as asset allocation, they will continue to lean on human insights for thornier issues such as how to best to finance a child’s education.

Advice takers

The report notes four distinct groups of advice takers, including the nearly 80% of Americans that are not taking advantage of financial advice of any kind.  This group tends to be about 45 years old and make about $43,000 a year. 

About half  of this group have investments, and just 4% trade online.  As a consequence, most cannot afford – or don’t want to pay for – investment advice. 

Most are not comfortable enough with technology to take advantage of online tools. However, as a group they are more inclined to make their own investment decisions than the groups with the exception of the online-advice-only group.
The second group, those that rely strictly on human advisors are age 50 on average, with an annual income of $61,300 and a net worth of nearly $245,000.  While over half (57%) have access to a PC at work, as a group they are inclined to defer to the investment expertise of others. 
On the other hand, those who rely strictly on electronic assistance tend to be younger, 43, on average.  They also tend to be well off, with average incomes of $57,200 per annum, and an average net worth of $207,000.  Not surprisingly, they prefer to handle their own investments.  Two-thirds have access to a PC at work, and 28% trade online.

The final group relies on both online and human advice components.  It is still relatively small, just 2% of the population and young , aged 44 on average. This group has an average income of $73,800 and an average net worth of $257,600.

Members of this group are more likely to view their finances as complex, and are somewhat less likely to self-direct their finances than any group, save the human-only crew.