Human brokers better beware because robots are slowly taking over the massive investment commissions and fees of Wall Street. The majority of investors have now embraced the superiority of economical robo-advisers to save money on charges and fees. This movement has now threatened the professions of thousands of brokers in the U.S. wealth management business valued at USD 20 trillion.
Machines vs. Human Brokers
According to a research conducted by Spectrem Group, a market research and consulting firm, approximately one in three investors reveal that the machines are exceptional at choosing stocks and decreasing their risks. Moreover, almost the same amount admits that they prefer machines since these are better at choosing retirement investments compared to human brokers. These respondents disclosed that their minimum net worth is USD 100,000.
The Technological Preference
More and more investors are now removing their assets from human wealth managers. Instead, they are using it to form an expanding mass of robo-advisers. The firm says that rookie investors, most of whom are millennials, prefer to use robo-advisers compared to humans.
The chief executive of Bethesda, Md.-based MV Financial named Masood Vojdani who is currently managing over USD 500 million assets is not even surprised at this revelation. Although he does admit that he has mixed feelings about the robots, he still understood why younger investors felt safer relying on it.
Robo-advisory is already a decade old and it is growing at a much faster rate than initially expected, which was supposed to be according to Consultancy A.T. Kearney. This startling development has propelled traditional wirehouses and brokers to come up with quick defensive measures and try to stay on top of the competition.