Robo-advisers and Investor Behavior

 

Topic: Robo-advisers and Investor Behavior

 

Speaker: Benjamin Loos,Mannheim University

 

Abstract: 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 plan to investigate the effects of robo-advisers on three aspects of clients’ portfolios: i) stock market participation and share of risky assets; ii) behavioral biases and portfolio efficiency; and iii) learning and spillover effects between robo-advised and non-robo-advised accounts. Preliminary evidence suggests 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 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. Our research has the potential to provide key insights into the trade-offs associated with using robo-advisers.

 

 

A light lunch will be provided at 1p.m. Please RSVP for catering purposes to Mala Kapahi by 12 noon on Monday, 3rd April.

 

Time: 12.00 – 1.00 p.m.

Venue: University of Technology, Sydney

             Building 8
             Dr Chau Chak Wing Building

             14 - 28 Ultimo Road, Ultimo

 

 

Enquiries: Mala Kapahi (Ph: +61 2 9514 7777)