Robo-advice and the future of delegated investment

Christoph Merkle

Journal of Financial Transformation, 2020, vol. 51, 20-27

Abstract: Robo-advisors can replace financial advisors and asset managers at low costs. However, human managers and advisors will survive. This is predominantly because although robo-advisors primarily appeal to a clientele of already financially sophisticated investors, they lack some of the qualities people look for in a “money doctor”, and their business models have not yet stood the test of time. While a general algorithm aversion is absent in the financial domain, even tech-savvy millennials do not particularly favor robo-advisors. As new survey data shows, investors view algorithms as an aid to human managers rather than competitors. A hybrid model with humans and robos working together, as already implemented by some financial institutions, might be the future of delegated investment.

Keywords: Robo-advice; delegated investment; money doctor; algorithm aversion. (search for similar items in EconPapers)
JEL-codes: G11 G21 G23 G51 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:jofitr:1638

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