Robo-advice requires an element of human interaction to increase client satisfaction, according to a Cerulli Associates report on the US advice market.

“There is a misconception that digital advice means no human interaction between the customer and the firm delivering the advice,” Associate Director Tom O’Shea said.

“Cerulli has found even the most automated advice platforms allow a consumer to reach a representative through a toll-free number or online chat.”

The researcher questioned direct firms and found consumer satisfaction increases at least 15 percentage points when a human is involved in delivering advice.

It says the term robo-advice is deceptive “because most robo-advisers offer clients access to a representative via the telephone, web chat, or video chat. Cerulli believes several retail direct firms will enter the digital advice market because these firms grow by realising new ways to scale their interactions with consumers.

“Digital advice is an obvious and powerful opportunity for direct firms to build scale.”

After questioning US wealth managers that use robo-advice, Cerulli arrived at a typical client for the channel. They would be 27 years old, earn $US80,000 ($111,283) per year, have $US100,000 ($139,118) in savings and a goal to retire by the age of 67.

Cerulli says firms providing robo-advice are expanding their services beyond the direct-to-consumer space. They are including automated financial management systems to link human advice with a back-office service to the customer.

“According to Cerulli research, 54% of millennials are comfortable with an online advisory relationship,” the report says.

“All financial services firms will find they must deliver advice via the internet, further increasing the convergence between the digital and the human element.”