Covid-19 accelerates shift in expectations for investment advice, finds DIAMAN survey

Shoppers wearing masks

Investor perceptions towards investment advice have changed as a result of Covid-19 induced volatility, according to key findings from DIAMAN Partners Ltd, an investment management fintech.

As the UK cautiously returns to aspects of normal life, people’s views on investment advice have altered and are unlikely to return to pre-lockdown attitudes.

In the wake of recent market uncertainty, investors are placing more importance on retaining a human-touch within advisory services (74 per cent), with only 9 per cent of respondents saying they want to use a ROBO adviser with no human involvement.

Although stock market crashes have left investors on automated advice platforms feeling unsupported, the research shows that value-add digital solutions remain important for the industry: 67 per cent of investors are calling for a digital experience that also enables interaction with a human advisor – but without the fees associated with bespoke services.

The research also shows that lower investor returns have accelerated higher client expectations around advisory fees. When asked what, if anything, are you struggling to get from your current investment adviser right now, fees that reflect value for service was ranked the top consideration (28 per cent).

The findings, which present a snapshot of UK investor sentiment, expose a gap that currently exists in the wealth management industry when it comes to advice services. According to the majority of UK investors (52 per cent), the disparity between high-cost, bespoke investment services and low-cost, automated advice has grown too big.

Daniele Bernardi, CEO of DIAMAN, says: “Over the last decade, digital tools have been used to drive down costs for investors, but at the cost of less human interaction, impacting investor returns and risk exposure as a result. The global pandemic is acting as a catalyst for the wealth management industry to re-evaluate current advisory services and structures. The findings show that COVID-19 has accelerated already shifting expectations among investors, creating further demand for a hybrid approach to investment advice.”