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

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 int...

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Bibliographic Details
Published in:Journal of financial services research 2022-10, Vol.62 (1-2), p.91-125
Main Authors: Oehler, Andreas, Horn, Matthias, Wendt, Stefan
Format: Article
Language:English
Subjects:
Advisors
Automation
Economics and Finance
Extraversion
Finance
Financial Advice
Financial Services
Household Finance
Investment advisors
Investments
Investors
Locus of control
Loss control
Macroeconomics/Monetary Economics//Financial Economics
Money
Optimism
Personal Finance
Portfolio Management
Risk exposure
Robo-advisor
Undergraduate students
Willingness
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Summary: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.
ISSN:1573-0735
0920-8550
1573-0735
DOI:10.1007/s10693-021-00367-8