Relying on digital platforms for everything from dinner reservations to dating is routine for many millennials, but it turns out that money management has been slower to catch on. According to Investopedia’s Affluent Millennial Investing Survey, while 20% of respondents use robo-advisors, the majority are still reporting a preference for human financial advisors.

However, affluent millennials who do use robo-advisors report being more satisfied with investment outcomes than non-users, with 31% saying their investments performed “extremely well” versus 18% for non robo-users.

Who Uses Robo-Advisors?

Investopedia’s survey of 1,405 individuals found that 20% of affluent millennials (ages 23-38) use robo-advisors, compared to only 13% of Gen X respondents. Looking at a younger segment of the population, 31% of those age 18-22 use robo-advisors compared with only 9% of investors aged 47-54, suggesting acceptance of digital advisors is increasing with each generation.

The Investopedia Affluent Millennial Investing Study suggests that financial acumen plays a key role in whether or not affluent millennials choose to use a digital advisory service. Of those who do use robos, 26% say they feel knowledgeable about investing, while only 12% said they did not. 

Respondents who report using robo-advisors are 2X as likely to manage their finances daily. The finding suggests that digital platforms tend to attract more engaged investors who want to actively manage, or at least monitor, their money regularly.

Further, robo-advisor adoption is more prevalent among men: 27% of male respondents use them, versus 16% of women. However, the gender gap narrows among Gen Z respondents, with 35% of men using robo-advisors compared to 27% of women.

Notably, respondents who do use robos also report being less risk-averse. 12% say their portfolio is “very risky,” compared to only 5% of non-robo-users. Most robo-advisors gather basic information about a client’s financial goals and use algorithms to direct their assets into a portfolio of exchange-traded funds, eliminating most or all human contact, while also limiting risk, making their appeal to "risky" traders all the more interesting.

The allure of robo-advisors for non-risk-averse investors may be due to their greater degree of customization compared to target date funds. The user chooses the asset allocation rather than a fund manager, with the robo serving as a monitor, periodically rebalancing the portfolio over time to maintain the user's selected allocation.

Factors Driving the Growth of Robo-Advisors

The survey revealed that the most prominent robo-advisors among affluent millennials don't entirely align with the largest players (by AUM) in the market. While some digital-first options like Betterment took a large share of this generation's robo-dollars, more traditional asset managers like Fidelity, Charles Schwab and Vanguard were also reported as popular choices.

“Affluent millennials who use a robo-advisor are showing a preference for established brokers’ robo offerings," says Caleb Silver, Investopedia Editor in Chief. "This may be because they're already familiar with these brokers through workplace retirement plans."

As the robo-advisor industry has developed, some providers have started to offer more specialized services, like the ability to minimize tax liability by selling funds that are losing money, a strategy known as​ ​tax-loss harvesting​. Others, like Betterment, offer higher-tiered plans that provide access to human financial planners in addition to automated asset management services.

“Robo-Advisors were born out of the confluence of the financial crisis and the rise of the smartphone,” says Silver. “They're becoming more popular now as the first generation to grow up with smartphones enters into the investing and financial planning part of their lives, which they fully expect to be a digital and transparent experience.”

Another factor driving the popularity of algorithm-driven wealth managers is the relatively low fee structure. For example, Betterment and Wealthfront both charge advisory fees of 0.25% annually, which users pay on top of the expenses for the underlying funds in which they invest.

The Medium is the Message

"Robo-advisors are catching on with younger investors because of their relationship to technology," says Theresa Carey, brokerage expert at Investopedia. “This is a generation that grew up with mobile phones in-hand, so making those services app-based created a natural draw.” Mobile-based platforms create an ease-of-use that may also help encourage affluent millennials to invest, as accounts can be opened, funded and managed from a phone.

Robo-advisors also serve as a viable option for adults with a smaller pool of assets to invest. “The digital-only experience encouraged millennials to start with relatively small amounts and add to it monthly,” says Carey. While a few providers cater to the more well-heeled investors–Personal Capital, for instance, requires at least a $100,000 investment to open an account–most open their doors to a much wider range of investors. And services like Betterment, Blooom, and WiseBanyan have eliminated minimum account balances altogether.

The Bottom Line

As the survey reveals, robo-advisor platforms are gaining traction with a new generation of affluent investors. While many may still prefer a human financial advisor, robos tend to attract affluent millennials who are highly engaged with their finances, and feel comfortable making their own financial planning decisions, right from their phone or laptop.


Investopedia sought to examine what motivated investment decisions for a generation that came into adulthood during the great recession and has notoriously encountered a variety of challenging economic factors. In order to understand attitudes around investment, we studied those who should have disposable income to invest, referred to as “affluent millennials.” By examining a segment of the population that makes a greater than average yearly income for their age group, we hoped to eliminate financial hardship from the reasons they may not invest. 

Working with market research firm Chirp Research in May 2019, Investopedia obtained responses from 1,405 Americans, comprised of 844 affluent millennials (ages 23-38) through an online survey and compared their actions and attitudes to 430 Gen X and 131 Gen Z respondents. Affluent younger millennials were defined as those ages 23-29 with a household income (HHI) of $50,000 or more, and older millennials as those ages 30-38 with a HHI of $100,000 or more. The survey’s median millennial income was $132,473, compared to a median millennial HHI of $69,000.

Before fielding the quantitative survey, Investopedia wanted to ensure the right kinds of questions would be asked, in language that resonated with the respondents. Investopedia worked with Chirp to conduct nine 60-minute 1-on-1 interviews with participants in Birmingham, Chicago, Dallas, and New York City. The interviews focused specifically on the language affluent millennials use to describe experiences managing their own finances, as well as their opinions, beliefs, and attitudes toward managing money and investing.