The Rise of Robo-Advisors: Implications for Traditional Investment Management

Abstract

This research paper explores the emergence and evolution of robo-advisors within the investment management landscape and analyses their implications for traditional investment management practices. Robo-advisors, driven by technological advancements and changing investor preferences, have disrupted the industry by offering automated, algorithm-based investment advice and portfolio management services. The paper examines the key features of robo-advisors, including their cost-effectiveness, accessibility, and ability to provide personalized investment strategies. Furthermore, it delves into the challenges and opportunities presented by robo-advisors for traditional investment managers, such as fee compression, client acquisition, and regulatory compliance. By synthesizing existing literature, case studies, and industry trends, this paper aims to provide insights into the transformative impact of robo-advisors on traditional investment management and offers recommendations for practitioners and policymakers navigating this evolving landscape.