By now, you’ve probably heard about a new startup trying to make financial advice more convenient and more accessible.
But if you’re one of the millions of millennials who are either struggling to figure out what’s in your 401(k) or just don’t want to spend $1,500 per year, you might be surprised to learn that digital investment advice is also a growing industry.
This new wave of financial advice, called “digital asset management,” is being fueled by two trends.
First, millennials are taking to their smartphones, tablets, and social media platforms to seek out advice and recommendations.
Second, they’re increasingly looking to invest in digital assets, like stocks and bonds, which are often far more expensive than traditional assets.
Investment advisers are starting to invest more in digital asset management companies.
According to the Investment Adviser Association, the number of active advisers and advisors providing financial services on platforms like Investopedia grew from 5,872 advisors in 2016 to 11,769 in 2017.
The number of advisors who work on platforms that allow users to buy and sell stocks, for example, also increased from 1,788 in 2016, to 2,072 in 2017 and to 3,085 in 2018.
Digital asset managers are a huge part of the millennial investing ecosystem.
They can be seen as the answer to a growing lack of financial information and advice that can be helpful to millennials, said Scott Anderson, CEO of Investopesis, a brokerage that specializes in investing for millennials.
In addition to digital asset managers, millennials also increasingly prefer to shop for financial products and services online.
In 2017, millennials bought an average of $13,839 worth of financial products, including financial advisory products, online, and in stores, according to a study from financial data firm Mintel.
For comparison, in 2016 millennials spent an average $7,964 per year on their personal savings accounts.
Investopesis’ study found that millennials were also more willing to spend money online than they were online.
They spent $2,908 per year online on financial products in 2017, compared to an average spend of $1 and $1.50 per year they spent online, respectively, according, Mintel’s study.
“In the past, the idea of going online was just something that millennials thought about, like it was a luxury thing,” said Anderson.
“Now, millennials really think about investing and they want to be able to get in and get some of the best advice out there.”
According to the study, millennials have more confidence in financial advisors, and they trust their advisers more.
When asked what they would like to see from investment advisers, millennials were more likely to list more financial product recommendations, as well as more financial products that are more customizable, according.
The research also found that they were more willing than they are to trust their financial advisors when it comes to advice about their finances.