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Millennials are comfortable with using 401(k) robo advisors — 54% of millennials surveyed by student loan and policy research firm LendEDU said that their robo advisor produced better results than they were expecting in 2017, and 42% believed that their robo advisor outperformed the market last year.
But, they may not be prepared to take advice from human advisors in the event of a stock market correction or crash, says James Hamory, analyst with Hoboken, N.J.-based LendEDU.
“This generation is very connected with technology and much more comfortable with handling apps compared to people their parent’s age. It’s not surprising that millennials would be comfortable with an app as opposed to talking to an advisor in a face-to-face setting,” says Hamory.
Betterment, which offers 401(k) robo advisor services, agrees with the assessment that millennials prefer technology over human interaction, according to Joe Ziemer, a vice president. Younger workers “really just want to control the experience and have it more on their terms, so they only want to talk with someone when it’s absolutely necessary,” he says.