Robo-advice not a hit with millennials

Robo-advice not a hit with millennials

More than half of all millennials want mortgage advice face-to-face with just one in four saying they would use a robo-advice service, research has revealed.

According to the survey by EDM Mortgage Support Services, 72 per cent of millennials expect to get a mortgage in the next five years with 57 per cent of those saying they would want personal contact. 

Just 26 per cent said they would be willing to take out a mortgage online.

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Joe Pepper, managing director of EDM MSS, said advancements in technology may change millennials’ views going forward.

Mr Pepper said: “It is clear that even millennials perceive mortgages as something that is so complicated and important as to require face-to-face explanation.

“Part of this could be because of the absence of technology that is up to the job.

“In time we expect this to change and all the attributes of smart technology, including speed, accuracy, broad market product offerings, security and lower costs, will be brought into the mortgage process to the benefit of all concerned, including clients, brokers, lenders, valuers and conveyancers.”

Mel Kenny, chartered financial planner at Radcliffe & Newlands, said borrowers recognise the gravity of mortgage debt.

He said: “While millennials tend to shun the virtues of professionals compared with their predecessors, when it comes to arranging a huge amount of debt to hang over their head they seem to recognise the need to be careful with their decisions.” 

The robo-advice debate has split the industry in recent months. 

Earlier this week Nationwide’s digital advice director Chris Williams said robo-advice is necessary to move the advice sector forward but added that an ‘off-the-shelf’ product was not the solution.

Speaking at a roundtable hosted by technology firm EValue, Mr Williams said: “The need for robo-advice is not to disintermediate advisers or an evangelical desire to reduce the cost of investment - it is a desire to improve business models to serve more customers. 

“But it is not about buying an off-the-shelf product, or white labelling another person’s robo-advice service.”