RT Journal Article
SR Electronic
T1 To Advise, or Not to Advise—<em>How Robo-Advisors Evaluate the Risk Preferences of Private Investors</em>
JF The Journal of Wealth Management
FD Institutional Investor Journals
SP 70
OP 84
DO 10.3905/jwm.2018.21.2.070
VO 21
IS 2
A1 Michael Tertilt
A1 Peter Scholz
YR 2018
UL https://pm-research.com/content/21/2/70.abstract
AB Robo-advisors promise efficient, rational, and transparent investment advisory. The authors analyze how robo-advisors determine their users’ risk tolerance and which equity exposure is derived from the individual risk profile. Findings indicate significant differences in the quality of offered investment advice. Robo-advisors usually ask relatively few questions in the assessment of their users’ risk profile, and it is particularly surprising that some of the questions do not seem to have any impact on the risk categorization. Moreover, the recommended equity exposure is relatively conservative.TOPICS: Wealth management, quantitative methods