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Young UK investors prove keen on robo-advice

Young UK investors prove keen on robo-advice

Young UK investors are the keenest users of online advice solutions, according to a survey by Legg Mason.

The firm surveyed more than 1,000 investors aged between 18 and 39, finding that those in the UK place almost as much trust in the online channel as face-to-face advice.

In total, 85 per cent of UK-based ‘millennials’ said they were comfortable with robo-advice, while 80 per cent said they would trust such advice.

Adam Gent, head of UK sales at Legg Mason, said: “Robo-advice remains a relatively new concept in the UK compared to the US, where it is more established, but the levels of support for this new advice channel suggests it is far more than a passing fad.

“Indeed, with such trust being placed in online advice by younger investors, many of whom will have grown up with the internet, it would appear the future looks bright for robo-advisers as they seek to establish footholds in the UK advice market.”

On average, 59 per cent of millennials globally expressed comfort with robo-advice, with 63 per cent trusting it. Within Europe, 70 per cent were comfortable with robo-advice, with 65 per cent trusting it.

Overall, professional financial advisers scored more highly among UK millennials, with 91 per cent feeling comfortable with their adviser and 88 per cent having trust in them.

But Mr Gent said the narrow gap between the different channels shows the extent to which robo-advice is taking off among the younger generation.

Last month the regulator and government published the final report of the Financial Advice Market Review to tackle the “advice gap”, which recommended increased use of mass-market automated advice.

Providers like LV and Scottish Widows, direct-to-consumer platforms such as Nutmeg, and financial advice firms such as Lighthouse and Bellpenny are all considering moves into the market.

Legg Mason’s research was carried out on total of 5,370 high-net worth investors across 19 markets between 3 December and 8 January.

Of these, 2,122 were in Europe, with 200 aged between 40 and 75 in each of the eight markets where the study was conducted and 60 aged between 18 and 39.