Why Are More Younger People using robo-advisors instead of human advisors

Below is detail on Why Are More Younger People using robo-advisors instead of human advisors

Younger people are increasingly turning to robo-advisors over human advisors for several compelling reasons:

Cost-Effective Solutions: Robo-advisors typically charge lower fees compared to traditional human financial advisors. Younger investors, who may not have substantial wealth to manage initially, find robo-advisors more cost-effective. The fee structure is often based on a percentage of assets under management (AUM), and younger investors appreciate the affordability of robo-advisory services.

Accessibility: Robo-advisors are easily accessible through mobile apps and websites. Younger generations are more tech-savvy and comfortable conducting financial transactions online. The convenience of being able to manage their investments 24/7 from their smartphones or computers is a significant advantage.

No Minimum Investment Requirements: Many traditional financial advisors require a minimum amount of assets to be eligible for their services. Robo-advisors, on the other hand, often have no or very low minimum investment requirements. This inclusivity makes investing accessible to a broader audience.


Robo-advisors are known for their transparency. They provide clear information about their investment strategies, fees, and portfolio performance. Young investors appreciate this transparency and value the ability to make informed decisions about their investments.

Automation and Efficiency:

Robo-advisors use algorithms and automation to create and manage diversified portfolios. This appeals to younger investors who prefer a hands-off approach to investing. They can set their risk tolerance and investment goals, and the robo-advisor takes care of the rest, rebalancing portfolios as needed.

Data-Driven Recommendations:

Robo-advisors leverage data and analytics to make investment recommendations. They can provide personalized advice based on an individual’s financial situation and goals. This data-driven approach resonates with younger investors who are used to making decisions based on data and analytics in other aspects of their lives.

Lack of Trust in Human Advisors:

Some younger investors have a mistrust of traditional financial advisors, possibly stemming from past financial crises and scandals. They may perceive robo-advisors as more objective and less susceptible to conflicts of interest.

Education and Learning Opportunities: Many robo-advisors offer educational resources and tools to help users understand investing better. Younger investors who want to learn about finance and investing can benefit from these resources.


Robo-advisors can offer a high level of customization. Investors can choose portfolios that align with their ethical values or specific investment themes. This customization is appealing to younger investors who want to invest in ways that reflect their personal beliefs.


As younger investors accumulate more wealth over time, robo-advisors can scale with them. This scalability ensures that they can continue to receive investment management services that suit their needs as their financial situation evolves.

Why would you use a robo-advisor instead of a personal financial advisor

In summary of Why Are More Younger People using robo-advisors instead of human advisors, the shift towards robo-advisors among younger investors can be attributed to factors like cost-effectiveness, accessibility, transparency, automation, and a preference for data-driven solutions. While human financial advisors still play a crucial role in the financial industry, robo-advisors have carved out a niche by catering to the preferences and needs of the younger generation.

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