CHRISTOPH MERKLE | Associate Professor, Aarhus University

Robo-advisors can replace financial advisors and asset managers at low costs. However, human managers and advisors will survive. This is predominantly because although robo-advisors primarily appeal to a clientele of already financially sophisticated investors, they lack some of the qualities people look for in a ‘money doctor’, and their business models have not yet stood the test of time. While a general algorithm aversion is absent in the financial domain, even tech-savvy millennials do not particularly favor robo-advisors. As new survey data shows, investors view algorithms as an aid to human managers rather than competitors. A hybrid model with humans and robos working together, as already implemented by some financial institutions, might be the future of delegated investment.