Escalent: Affluent Investors Increasingly Use Robo Advisors

Core Insights - Trust in and engagement with financial advisors has reached a new high among affluent investors, defined as those with at least $100,000 in investable assets [1] - Wealth management firms have a critical opportunity to differentiate and drive growth by fostering trust and leveraging digital tools alongside human-centric advice [2] Affluent Investor Landscape - 42% of affluent investors reported having a traditional financial advisor, a 300-basis-point increase from the previous year [2] - Reliance on financial advisors is highest among first-wave baby boomers at 48% and Gen Z at 46%, while Gen X reported the lowest at 38% [2] Robo Advisor Usage - 20% of all investors reported using robo advisors, a 500-basis-point increase compared to the previous year [3] - Over half of Gen Z affluent investors (55%) are using robo advisors, up from 33% a year ago; 42% of millennials and 24% of Gen X investors also utilize robo advisors [3] Asset-Based Robo Advisor Reliance - Reliance on robo advisors is highest among investors with $100,000 to $500,000 in assets at 22%, compared to 18% for those with over $500,000 [4] - New robo advisor platforms, such as Robinhood's for investors with over $100,000 and Wealthsimple's entry into the U.S. market, indicate growing competition in this space [4] Self-Directed Investors - 34% of affluent investors reported being "self-directed," with the highest share among Gen Z and the silent generation at 36% [5] Trust Levels - Trust in the financial investment community is highest among those working with traditional financial advisors at 73%, an increase from 64% in 2023 [6] - Among self-directed investors, only 50% reported having trust in the financial investment community [6]