Robo-advisors: what we know and what we expect

Résumé 0

This paper examines how robo-advisory services could solve some fundamental problems in individual investors’ decision making and traditional financial advice, and promote financial inclusion. We show the role that artificial intelligence plays, and should play, in robo-advice. We emphasize the importance of recent discoveries in Explainable Artificial Intelligence (XIA) and the importance of developing customer/robo interactions. We examine how far the personalization of robo-advice recommendations can go, given the trade-off between the goal of personalizing advice and the risks associated with possible measurement errors regarding individual characteristics. Finally, we draw on the experience of other robotic domains to examine how trust in robo-advising can be generated and sustained, an important condition for the success of such services. JEL Classification: G11; G51; G41; G23; D14.