At what point do founders and employees stop using robo-platforms like Betterment, Ellevest, and M1 Finance and turn towards a service like Savvy?
Co-founder & CEO at Savvy
One is net worth. Once it crosses a certain number, we've found both qualitatively and quantitatively that people want to switch over. What is that number? It's hard to say exactly, but we typically see it at the $1M mark. As soon as that happens, there's an inclination to start considering other options.
We did a quantitative study of high net worth individuals—particularly between $1M-$10M net worth—and 85% of them said that they would want a financial advisor—an actual human—to speak with. 6% of them said that they'd be willing to consider using a robo, or that they do use a robo, at that scale. However, 100% of the respondents that would want a financial advisor said that they would be okay with the financial advisor using a robo. What we learned is that they value the human element, they don't like the robo piece, and they're okay if the advisor uses technology to do certain automation on the backend.
The other tipping point we found is around the start of any sort of big life event, such as buying a house or planning a family estate. When these financial planning types of decisions typically come up is another time when switching over might make sense, regardless of net worth.