The Rise of Automated Investment Advice: Can Robo-Advisers Rescue the Retail Market?
18 Pages Posted: 17 Aug 2017 Last revised: 8 Oct 2017
Date Written: August 15, 2017
Different types of financial advisers serve the massive and widely dispersed retail investment market. In a market riddled with conflicts of interests, many advisers exploit retail customers by pitching suboptimal products, leading to lower investment returns and lower overall growth — but also to greater profits for the financial advisers collecting kickback-style commissions. New financial technology firms, commonly known as Robo-Advisers, may disrupt this market and these exploitative practices. Still, these potentially disruptive automated investment advice firms face significant regulatory risks.
Keywords: automated investment advice, roboadvisers, robos, investment advisers, conflicts, securities, mutual funds, wealth management, asset management, fintech, financial technology, systemic risk, cybersecurity
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