Robo-advisors: A substitute for human financial advice?

Lukas Brenner and Tobias Meyll

Journal of Behavioral and Experimental Finance, 2020, vol. 25, issue C

Abstract: Using representative US investor data, we investigate whether automated financial advisors, also referred to as robo-advisors, reduce investors’ demand for human financial advice offered by financial service providers. Our results provide a strong negative relationship between using robo-advisors and seeking human financial advice. We show that the substitution effect of robo-advisors is especially driven by investors who fear to be victimized by investment fraud. Our findings suggest that robo-advisors seem to offer a valid alternative for seeking investment advice, especially among those investors who worry about potential conflicts of interest that appear in the context of human financial advice.

Keywords: Robo-advisor; Financial advice; Digitalization; FinTech; Digital wealth management (search for similar items in EconPapers)
JEL-codes: D14 D18 G11 O33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:25:y:2020:i:c:s2214635019301881

DOI: 10.1016/j.jbef.2020.100275

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