E*TRADE Study Reveals Many Investors Prefer a Hybrid Model When Considering Robo-Advisors
February 25 2016 - 8:05AM
Business Wire
Preference for digital hybrids spans
generations
E*TRADE Financial Corporation (NASDAQ:ETFC) today announced
results from the most recent wave of StreetWise, E*TRADE’s
quarterly tracking study of experienced investors. Results indicate
that, when choosing between three managed accounts, investors are
more likely to select a solution that combines digital guidance
with human support.
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View the full release here:
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When asked to choose between three account types — a low cost,
digital-only solution, managed and rebalanced solely by an
algorithm; a moderately priced, digital hybrid solution, defined by
automatic rebalancing and human guidance; or a higher cost,
advisor-driven account, managed solely by a professional —
investors are more likely to choose the digital hybrid model. This
preference is more pronounced among Millennial and Gen X
investors.
“The data suggest a new paradigm in robo-advisory models:
adaptive solutions backed by human support,” said Kunal Vaed, SVP
of Digital Channels at E*TRADE Financial. “The idea that younger
investors will only gravitate towards the cheapest solution is a
myth. While intuitive and insightful digital tools are a necessity
in catering to today’s investors, at the same time, investors seek
human guidance. Investors want to be able to talk to a
professional, especially during extreme market volatility.”
Mr. Vaed shed additional light on robo-solutions and investing
trends today:
- Machines are not taking over the
world. Despite the rise in software, the data suggest human
guidance and support still have an important place in the minds of
investors.
- Value matters. Much has been
said about how attractive low or no-fee platforms have become,
particularly for younger investors. Yet results show that
Millennials and Gen X are not entirely driven by cost. Many
investors today are willing to pay more for a robo-solution that
includes some human support.
- Active vs. passive management is not
either/or. While passive products like ETFs and index funds
remain popular, actively managed products continue to serve a role
in many investors’ portfolios.
Visit E*TRADE’s Newsroom for the full Q116 StreetWise study
results.
E*TRADE helps investors balance today’s needs with tomorrow’s
goals, through pioneering digital tools coupled with guidance
online and from financial consultants. To learn more about
E*TRADE’s trading and investing platforms and tools, visit
etrade.com.
For useful insight from E*TRADE and third-party investment
professionals, follow the Company on Twitter, @ETRADE.
About the Survey
This wave of the survey was conducted from January 6 to 11,
2016, among an online U.S. sample of 919 self-directed active
investors who manage at least $10,000 in an online brokerage
account. The survey has a margin of error of ±3.2 percent at the 95
percent confidence level. It was fielded and administered by
ResearchNow. The tracking study fields quarterly at the beginning
of each quarter and does not reflect data from the complete
quarter. The panel is broken into thirds of active (trade more than
once a week), swing (trade less than once a week but more than once
a month), and passive (trade less than once a month) investors. The
panel is 65 percent male and 35 percent female with an even
distribution across online brokerages, geographic regions, and age
bands.
Referenced Data
If you had to choose, in which of the following
managed accounts are you most interested?
AGE
TOTAL 25-34 35-54 55+
Account A, which costs more than B and C and is managed solely by a
human investment professional 27% 29% 23% 32% Account B, which has
a cost between A and C, is managed by an algorithm with automatic
rebalancing, and also offers professional human guidance 50% 53%
55% 43% Account C, which costs less than A and B and is managed
solely by an algorithm, with automatic rebalancing 23%
18% 22% 25%
About E*TRADE Financial and Important Notices
E*TRADE Financial and its subsidiaries provide financial
services, including online brokerage and banking products and
services to retail customers. Specific business segments include
Trading and Investing and Balance Sheet Management. Securities
products and services, including stocks, bonds, mutual funds,
options, and ETFs are offered by E*TRADE Securities LLC (Member
FINRA/SIPC). Managed Account Solutions are offered through E*TRADE
Capital Management, LLC, an investment adviser registered with the
Securities and Exchange Commission. Bank products and services are
offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or
its subsidiaries and affiliates. More information is available at
www.etrade.com.
The information provided herein is for general informational
purposes only and should not be considered investment advice. Past
performance does not guarantee future results. ETFC-G
About ResearchNow
ResearchNow, a leading digital data collection provider, powers
market research insights. They enable companies to listen to and
interact with the world’s consumers and business professionals
through online panels, as well as mobile, digital, and social media
technologies. Their team operates in over 20 offices globally and
is recognized as the market research industry’s leader in client
satisfaction. They foster a socially-responsible culture by
empowering their employees to give back. To find out more or begin
a conversation, visit www.researchnow.com.
E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks
or registered trademarks of E*TRADE Financial Corporation.
© 2016 E*TRADE Financial Corporation. All rights reserved.
E*TRADE Financial Corporation and ResearchNow are separate
companies that are not affiliated. E*TRADE Financial Corporation
engages ResearchNow to program, field, and tabulate the study.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160225005217/en/
E*TRADE Media
RelationsThayer Fox,
646-521-4418thayer.fox@etrade.comorE*TRADE
Investor RelationsBrett Goodman,
646-521-4406brett.goodman@etrade.com
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