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Investor Characteristics and their Impact on the Decision to use a Robo-advisor

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  • Andreas Oehler

    (Bamberg University)

  • Matthias Horn

    (Bamberg University)

  • Stefan Wendt

    (Bifröst University)

Abstract

We survey 231 undergraduate students to analyze how retail investors’ characteristics influence their decision to use a robo-advisor. Characteristics such as the willingness to take risk, extraversion, and optimism are significant in univariate tests but the willingness to take risk and the internal locus of control are significant in multivariate settings. Participants who use the robo-advisor invest more and are more likely to also invest on their own in both stocks and bonds. We also find statistically significant differences between participants who exclusively use the robo-advisor for investments in stocks and bonds and participants who use the robo-advisor and invest some money in stocks and bonds on their own.

Suggested Citation

  • Andreas Oehler & Matthias Horn & Stefan Wendt, 2022. "Investor Characteristics and their Impact on the Decision to use a Robo-advisor," Journal of Financial Services Research, Springer;Western Finance Association, vol. 62(1), pages 91-125, October.
    • Handle: RePEc:kap:jfsres:v:62:y:2022:i:1:d:10.1007_s10693-021-00367-8
    DOI: 10.1007/s10693-021-00367-8
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    Cited by:

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    2. Mukul Bhatnagar & Ercan Özen & Sanjay Taneja & Simon Grima & Ramona Rupeika-Apoga, 2022. "The Dynamic Connectedness between Risk and Return in the Fintech Market of India: Evidence Using the GARCH-M Approach," Risks, MDPI, vol. 10(11), pages 1-16, November.
    3. Berrin Arzu Eren, 2024. "Antecedents of robo-advisor use intention in private pension investments: an emerging market country example," Journal of Financial Services Marketing, Palgrave Macmillan, vol. 29(3), pages 683-698, September.
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    5. Cardillo, Giovanni & Chiappini, Helen, 2024. "Robo-advisors: A systematic literature review," Finance Research Letters, Elsevier, vol. 62(PA).
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    7. Zhu, Hui & Vigren, Olli & Söderberg, Inga-Lill, 2024. "Implementing artificial intelligence empowered financial advisory services: A literature review and critical research agenda," Journal of Business Research, Elsevier, vol. 174(C).
    8. Oehler, Andreas & Horn, Matthias, 2024. "Does ChatGPT provide better advice than robo-advisors?," Finance Research Letters, Elsevier, vol. 60(C).
    9. Alexia GAUDEUL & Caterina GIANNETTI, 2023. "Trade-offs in the design of financial algorithms," Discussion Papers 2023/288, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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