Saturday, September 9, 2017
Benjamin P. Edwards has posted The Rise of Automated Investment Advice: Can Robo-Advisers Rescue the Retail Market? on SSRN with the following abstract:
Different types of financial advisers serve the massive and widely dispersed retail investment market. In a market riddled with conflicts of interests, many advisers exploit retail customers by pitching suboptimal products, leading to lower investment returns and lower overall growth — but also to greater profits for the financial advisers collecting kickback-style commissions. New financial technology firms, commonly known as Robo-Advisers, may disrupt this market and these exploitative practices. Still, these potentially disruptive automated investment advice firms face significant regulatory risks.