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The Rise of Automated Investment Advice: Can Robo-Advisers Rescue the Retail Market?

17 Pages Posted: 17 Aug 2017  

Benjamin P. Edwards

University of Nevada, William S. Boyd School of Law

Date Written: August 15, 2017

Abstract

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

Suggested Citation

Edwards, Benjamin P., The Rise of Automated Investment Advice: Can Robo-Advisers Rescue the Retail Market? (August 15, 2017). Chicago-Kent Law Review, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3019548

Benjamin Edwards (Contact Author)

University of Nevada, William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

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