Economics research seminar: Simon Weidenholzer, University of Essex

Research topic: On the benefits of robo-advice in financial markets (with Marco Lambrecht and Jörg Oechssler)

Presenter

Simon Weidenholzer, University of Essex

Topic

On the benefits of robo-advice in financial markets (with Marco Lambrecht and Jörg Oechssler)

abstract

Robo-advisors are novel tools in financial markets that provide investors with low-cost financial advice, usually based on individual characteristics like risk attitudes. We study the benefits of robo-advice in a portfolio choice experiment running over ten weeks. Depending on treatment, investors either receive robo-advice, have a robo-advisor implementing recommendations by default, or have to invest on their own. While we observe no effect of robo-advice on initial market participation, we do find positive effects on continued market participation. Robos also help investors avoid mistakes, make rebalancing more frequent, and overall yield portfolios much closer to the utility maximizing ones. Robo-advisors that implement the recommendations by default do significantly better than those that just give advice.

 

Back to Economics Seminars Series
Acknowledgement of Country

UTS acknowledges the Gadigal people of the Eora Nation, the Boorooberongal people of the Dharug Nation, the Bidiagal people and the Gamaygal people, upon whose ancestral lands our university stands. We would also like to pay respect to the Elders both past and present, acknowledging them as the traditional custodians of knowledge for these lands.