Robo-Advisors versus Traditional Investment Advisors: An Unequal Game

Abstract

To obtain diversified market exposure, a passive implementation of an investment strategy is generally cheaper, more efficient, and more transparent and thus a preferred way to invest for cost-sensitive clients. Robo-advisors will not only become the preferred investment solution for retail clients but will also gain importance in the affluent and high-net-worth individual segments. Through cooperation with fintech companies or acquisition of innovative technology, robo-advice could become an increasingly important element for traditional banks and wealth managers.