Financial education and digital asset management: What's in the black box?

Rouven Litterscheidt and David J. Streich

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2020, vol. 87, issue C

Abstract: We study the effect of a financial education intervention on the propensity to delegate financial decision-making to a digital asset management tool (robo-advisor). Our results suggest that investors are more inclined to delegate financial decision-making when they receive detailed information on the investment principles underlying the robo-advisory algorithm. The intervention also affects investors’ independent investment behavior as it increases diversification and revealed risk aversion, while it decreases self-reported risk aversion. Our findings imply that robo-advisors benefit from providing financial education to prospective investors and that financial education may indirectly affect investment outcomes by encouraging the use of financial advice.

Keywords: FinTech; Robo advisory; Financial advice; Financial education; Technology adoption; Financial decision-making (search for similar items in EconPapers)
JEL-codes: D14 G11 G41 O33 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:87:y:2020:i:c:s2214804319304367

DOI: 10.1016/j.socec.2020.101573

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