VGSF Finance Research Seminar

Wirtschaftsuniversität Wien , Departments 3 3.0.225 11:00 - 12:30

Art Vortrag/Diskussion
Vortragende/r Alessandro Previtero (Indiana University)
Veranstalter Wirtschaftsuniversität Wien Robo-advisers and Investor Behavior
Kontakt office@vgsf.ac.at

The FRS informs about state-of-the-art research in Finance.

In recent years, the rise of robo-advisers has provided a new, potentially more cost-effective approach for offering financial advice. Using unique data from a large German retail bank, we investigate the effects of robo-advisers on clients' portfolios. We find that after joining a robo-advising service, clients increase financial risk-taking, hold more diversified portfolios with a larger fraction of index funds, exhibit lower home bias and trend chasing, and increase their (buy) turnover. These effects are generally stronger for former self-directed investors than investors who have previously worked with a human financial advisor. Investors also learn from the robo-advisory tool, as their portfolio efficiency improves also in the non-robo advised part of their portfolio. Our research can help understand the trade-offs associated with using robo-advisers.

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