SINGAPORE: Robo-advisors are increasingly gaining traction among younger Singaporeans, especially those under 35, according to a recent survey by Capco. This trend is indicative of a broader shift toward digital financial management solutions in Singapore’s wealth management sector.

The survey, focusing on individuals with a minimum of $100,000 in investable assets, found that nearly 90% of respondents under 35 have boosted their use of digital channels over the past two years.

This contrasts with a 75% increase among those aged 45 to 64. Notably, 76% of the younger demographic expressed comfort with artificial intelligence (AI) in guiding their wealth management decisions, significantly higher than the 42% observed in the older group.

Robo-advisory services have become particularly popular among younger Singaporeans. According to the survey, 40% of respondents under 35 currently use robo-advisors, compared to just 16% of those aged 45 to 64. The trend looks set to continue, with 27% of the younger cohort expressing a strong likelihood of using robo-advisors in the future, compared to a mere 8% of older respondents.

Capco’s survey highlights the growing importance of digital communication in wealth management. While face-to-face interactions remain valued, the rise of sophisticated digital communication tools is reshaping client expectations. Capco advises wealth managers to adopt an omnichannel strategy to enhance client experiences and cater to the preferences of digital-native investors.

The survey also revealed that a significant portion of respondents—74%—manage at least part of their wealth independently, while 31% rely on wealth managers or financial advisors. Overall, 27% of respondents use robo-advisors, with men twice as likely to utilize these services compared to women (33% vs. 17%).

A hybrid approach that combines digital self-service with human interaction is favored by 43% of respondents for remote investment or wealth management services. When seeking investment advice, 69% turn to online research, 60% consult wealth managers or advisors, 45% rely on friends, peers, and family, 36% refer to investment books, and 35% look to social media.

Younger Singaporeans also show a high propensity for switching wealth management providers, with 57% under 35 considering a change in the next 12 months. Identifying the right advisor remains a significant challenge, cited by 37% of respondents as a barrier.

This shift towards digital and AI-driven financial tools reflects the evolving landscape of wealth management in Singapore, unveiling the need for wealth managers to adapt to changing client expectations and technological advancements.