Robo-Advising

Francesco D'Acunto and Alberto G. Rossi

No 8225, CESifo Working Paper Series from CESifo

Abstract: In this work, we first discuss the limitations of traditional financial advice, which led to the emergence of robo-advising. We then describe the main features of robo-advising and propose a taxonomy of robo-advisors based on four defining dimensions---personalization, discretion, involvement, and human interaction. Building on these premises, we delve into the theoretical and empirical evidence on the design and effects of robo-advisors on two major sets of financial decisions, that is, investment choices (for both short- or long-term horizons) and the allocation of financial resources between spending and saving. We conclude by elaborating on five broadly open issues in robo-advising, which beget theoretical and empirical research by scholars in economics, finance, psychology, law, philosophy, as well as regulators and industry practitioners.

Keywords: FinTech; behavioral economics; algorithmic advice; A1; financial regulation; financial literacy (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-fle, nep-fmk and nep-pay
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8225

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