Robo-advisers and investor behavior

Author

Benjamin LOOS, University of New South Wales
Pengfei MA, Singapore Management UniversityFollow
Alessandro PREVITERO, Indiana University - Bloomington
Andres HACKETHAL, Goethe University

Publication Type

Working Paper

Publication Date

5-2024

Abstract

Using data from a large German retail bank, we investigate the effects of the introduction of a robo-advisory tool on clients’ portfolios. Robo clients experience a significant increase in financial risk-taking and improve portfolio efficiency along several dimensions (more diversification, less home bias, more investment in passive funds, reduced investment fees). Our evidence is consistent with robo-advisers being a more cost-effective approach for offering financial advice, especially to less sophisticated investors.

Discipline

Finance and Financial Management | Portfolio and Security Analysis | Technology and Innovation

Research Areas

Finance

First Page

1

Last Page

36

Embargo Period

1-25-2026

Citation

LOOS, Benjamin; MA, Pengfei; PREVITERO, Alessandro; and HACKETHAL, Andres. Robo-advisers and investor behavior. (2024). 1-36.
Available at: https://ink.library.smu.edu.sg/skbi/61

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.