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Pushed by various economic, regulatory and technological developments, robo-advisors are meanwhile considered one of the most important disruptive trends in the asset and wealth management industry. To evaluate the potential of robo-advisors to provide a new perspective to retail investors on the capital markets in the European Union, a systematic literature review was carried out on a practical and regulatory level with respect to selected criteria. Semi-structured interviews with experts from different fields allowed to get more in-depth and comparative information to be included in the research design. Results indicate that there is first and foremost a lack of consensus on the term "robo-advisory" on behalf of finance, as well as legal experts. Nevertheless, on a practical level, robo-advisors have the potential to attract retail investors back into capital markets, above all thanks to their simple and low-cost fee structure. On a regulatory level, robo-advisors in the European Union are embedded in a resilient framework - with MiFID II as its corner stone - which, however, needs clarification or guidance in certain regards, for example by ESMA, to ensure that risks for retail clients are mitigated.

Robo-Advice – Robo-investing – Digital Investment Advice/Portfolio Management – Automated Investment Advice/Portfolio Management – Traditional Financial Advice/Portfolio Management – Investor Protection – MiFID II --- Sciences économiques & de gestion > Finance

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This master thesis aims to study the existence of a link between the sophistication of roboadvisors and the returns they generate. Our analysis covers the period from may 2015 to April
2021. The data set we exploit comes from a major German comparison website for online
brokers and digital asset managers, brokervergleich.de.
Since returns are not published in the same way and some robo-advisors were created at
dates later than our first data, we divided our sample into 5 sub-samples. In addition to monthly
returns, through several risk adjusted performance measures such as the Sharpe ratio, Omega
ratio, Calmar ratio, or Jensen’s alpha we measured the performance of robo-advisors. The
variables we have chosen to reflect complexity of robo-advisors are: the number of offers, the
human involvement in the portfolio management process, the management style, the frequency
of rebalancing and the investment strategy. We have tried to account for the degree of influence
that these variables have on the performance measures calculated on the basis of the monthly
returns, first in a discrete way, then in a compiled way via a score constructed on the basis of
these complexity proxies variables.
Our findings show that there is indeed a link between complexity and robo-advisors’ fees.
But the low statistical significance and small sample size do not allow us to assert any link
between complexity and performance measures

Fintech --- WealthTech --- Innovation --- Portfolio Choice --- Technology Adoption --- robo-advisor --- artificial intelligence --- Sciences économiques & de gestion > Finance

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Nowadays, technology and innovation are more and more present in our daily lives. With the increasing use of mobiles and e-commerce, we are experiencing a new digital revolution. The sector of the economy that is most affected by this advance is the financial sector, which has seen an unprecedented increase in the number of Fintechs during the past few years.
It has never been easier to make banking or financial operations or transactions online and even directly on our smartphones. Whether it is making payments over the internet through payment services providers (PSP), or investing money through tools such as robo-advisors, these online platforms are now considered to be more efficient, faster and less costly than humans.
Therefore, the following questions arise : Since they offer different but complementary services, why can’t we link these platforms to improve their respective businesses and make life easier for the customers ? How to invest in the financial markets through a robo-advisor the sleeping money of individuals, PSP users ? How do Paypal, the online payment pioneer, and Acorns, a well-known American robo-advisor, do business together ?
To answer these questions, the study, based on a series of interviews with professionals from the sector in Luxembourg, focuses on the European classification of PSP into three types of licenses (payment institutions, electronic money institutions, credit institutions or bank). Considering the two first separated from the third in terms of strategy and by taking into account the conditions for obtaining the different licenses as set out in the law, it proposes various partnership insights for each of them, in accordance with the needs of any robo- advisor.

Online Payment – Robo-advisor – Fintech – Automation – License – Partnership – Innovation – Bank – Wealth Management – Sleeping Money --- Sciences économiques & de gestion > Finance

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Nowadays, technology is increasingly being used in our everyday life and therefore, it appears we stand on the brink of the fourth industrial revolution. One of the economic sector that is the most affected by this technological advance is none other than that of finance. Indeed, financial technology, also known as fintech, has really taken off since the year 2012 and continues its expansion by always proposing new services. “Robo-advisors” are part of these new services and are considered to be the latest manifestation of the long technological development that has transformed the banking sector over the last twenty years. 
Recognized as the pioneers of this technology, U.S. companies such as Betterment, Wealthfront or Personal Capital possess the majority of the assets under management. Nevertheless, given the success achieved in the United States, new robo-advisors arrive in Europe with the dream of duplicating the success of their U.S. counterparts and thus conquer this new market with their automated wealth management services. Besides having a lower pricing structure, these latter present several advantages: they are faster to calculate and make fewer errors than humans, they provide unbiased advice not influenced by external emotions and they are transparent. 
Therefore, seeing those advantages, the following questions arise: will these robo-advisors pose a threat to the traditional financial institutions which may lose clients? Or should these traditional financial institutions see the emergence of robo-advisors as an opportunity to integrate this new technology into their business? 
In order to answer these questions, this study indicates which strategies a robo-advisor should follow if it wants to win the investors’ confidence and how traditional financial institutions react to the arrival of these new potential competitors.

Robo-advisor --- Fintech --- Automated wealth management --- Automation --- Human advisor --- Traditional financial institutions --- Incumbents --- Financial algorithm --- Transparency --- Sciences économiques & de gestion > Finance