Financial literacy, robo-advising, and the demand for human financial advice: Evidence from Italy

David Aristei and Manuela Gallo

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Abstract: This paper investigates the impact of objective financial knowledge, confidence in one's financial skills, and digital financial literacy on individuals' decisions to seek financial advice from robo-advice platforms. Using microdata from the Bank of Italy's 2023 survey on Italian adults' financial literacy, we find that individuals with greater financial knowledge are less inclined to rely on online services for automated financial advice. Conversely, confidence in one's financial abilities and digital financial literacy enhance the likelihood of utilising robo-advice services. Trust in financial innovation, the use of digital financial services, and the propensity to take risks and save also emerge as significant predictors of an individual's use of robo-advice. We also provide evidence of a significant complementary relationship between the adoption of robo-advisory services and the demand for independent professional human advice. By contrast, a substitution effect is found for non-independent human advice. These findings highlight the importance of hybrid solutions in professional financial consulting, where robo-advisory services complement human financial advice.

Date: 2025-05, Revised 2025-05
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