Abstract
The given research paper examines the characteristics of German private investors regarding the probability of using robo-advisory-services. The used data set was gathered for this purpose (N = 305) to address the research question by using a logistic regression approach. The presented logit regression model results indicate that the awareness of sustainable aspects make a significant difference in the probability of using a sustainable robo-service. Additionally, our findings show that being male and cost-aware are positively associated with the use of a sustainable robo-advisor. Furthermore, the probability of use is 1.53 times higher among young and experienced investors. The findings in this paper provide relevant research findings for banks, asset managers, FinTechs, policy makers and financial practitioners to increase the adoption rate of robo-advice by introducing a sustainable offering.
Highlights
The findings in this paper provide relevant research findings for banks, asset managers, FinTechs, policy makers and financial practitioners to increase the adoption rate of robo-advice by introducing a sustainable offering
The choice of methodology is grounded in the existing research gaps, which are elaborated in Section 1.1 and 1.2 in the fields of sustainability and robo-advisory
The logistic regression analysis was conducted to predict the key determinants considered by young professionals to use the offer of sustainable robo-advisors
Summary
The findings in this paper provide relevant research findings for banks, asset managers, FinTechs, policy makers and financial practitioners to increase the adoption rate of robo-advice by introducing a sustainable offering. Robo-advisors are fully automated investment services, which are provided online for private and institutional investors. Characteristics of this service are the use of mathematical algorithms and the use of artificial intelligence to advise clients. Clients, who preferred to talk to a human advisor and even still prefer visiting a bank branch, are gradually changing their behaviors. Markets were constantly on a rising trend, thereby making it relatively easy for robo-advisors to show good performances. This is expected since robos often make effective use of exchange traded funds (ETFs), which represent a passive investment style by replicating a certain benchmark or index
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