Robo-Advisory--Investing in the Digital Age, edited by Peter Scholz, 15--25. New York: Palgrave Macmillan., 2020
10 Pages Posted: 28 May 2020
Date Written: April 30, 2020
Academic research into Robo-Advisory remains in its early stages. The debate has so far focussed on 1) definitorial questions regarding the nature of Robo-Advisory, 2) an evaluation of competitive differentiation based on strengths and weaknesses, 3) strategic options for both legacy service providers and Robo-Advisors to compete, as well as 4) design and calibration of Robo-Advisors to provide maximum value to customers. Key insights generated so far support four conclusions. Robo-Advisory is so far understood as a phenomenon whose competitive position will be defined by the automizability of processes. Therefore, Robo-Advisors are expected to focus on standardized low-complexity services targeting the lower and mid-income ranges while traditional advisory is expected to focus on high-complexity tasks provided to affluent customers. Traditional advisory is seen to have multiple strategic options to face attacks from challengers, primarily either taking a wait-and-do-nothing approach or engaging in strategic acquisitions to complement service offerings. Factors driving future success are expected to be the ease of interaction, work efficiency, information processing, and most importantly transparency, especially regarding pricing of advisory offerings.
JEL Classification: G11
Suggested Citation: Suggested Citation