Situating Robo-Advisory

Robo-Advisory--Investing in the Digital Age, edited by Peter Scholz, 15--25. New York: Palgrave Macmillan., 2020

10 Pages Posted: 28 May 2020

See all articles by Sinan Krueckeberg

Sinan Krueckeberg

University of the German Federal Armed Forces - Helmut Schmidt Universit├Ąt; HSBA Hamburg School of Business Administration

Date Written: April 30, 2020

Abstract

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.

Keywords: Robo-Advisor

JEL Classification: G11

Suggested Citation

Krueckeberg, Sinan, Situating Robo-Advisory (April 30, 2020). Robo-Advisory--Investing in the Digital Age, edited by Peter Scholz, 15--25. New York: Palgrave Macmillan., 2020, Available at SSRN: https://ssrn.com/abstract=3589348

Sinan Krueckeberg (Contact Author)

University of the German Federal Armed Forces - Helmut Schmidt Universit├Ąt ( email )

Hamburg
Germany

HOME PAGE: http://www.krueckeberg.us

HSBA Hamburg School of Business Administration ( email )

Germany

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