The Adoption of Robo-Advisors in Wealth Management: Benefits and Challenges
Keywords:
Robo-advisors, wealth management, artificial intelligence, financial advisory, hybrid advisory modelsAbstract
The rise of Robo-Advisors (RAs), powered by advancements in artificial intelligence and automated investment algorithms, has significantly transformed the wealth management sector. This paper investigates the factors contributing to the increasing adoption of robo-advisory platforms, highlighting the key advantages they offer to financial institutions and investors, along with the major challenges preventing widespread use. The study analyzes how RAs support financial inclusivity, reduce advisory costs, and address behavioral biases, while also identifying limitations such as reduced personalization, regulatory ambiguity, and inconsistent performance during market instability. The paper concludes by examining the industry’s future direction, emphasizing the growing prevalence of hybrid advisory models and the necessity for updated regulatory frameworks.
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References
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