Major Department

Finance

College

College of Business

Degree

BBA (Bachelor of Business Administration)

Session and Year of Graduation

Spring 2019

Honors Major Advisor

Jennifer A. Blair

Thesis Mentor

Jeffrey Hart

Abstract

This paper investigates the threat of robo-advisors to the wealth management industry as trends show the increased propensity of the Millennial and Gen Z generations to migrate away from traditional financial advisors. It also presents potential topics for future research related to the matter. A primary goal of robo-advisors is to minimize costs and avoid conflicts of interest, all while appealing to a growing population of technologically savvy investors. Thus, consumer preferences, particularly those of the Millennial and Gen Z generation, and their willingness to “bare-all” to a computer-based algorithm lies at the center of the debate regarding the threat of robo-advisors to the wealth management industry, and what can be done by human advisors to adapt. This consumer willingness will be explored.

Furthermore, in order for robo-advisors to subvert traditional financial advisors, they must achieve returns consistent to or greater than those of their human counterparts, and must also uphold a fiduciary standard when providing investment advice. This paper aims to summarize the arguments for and against the widespread use of robo-advisors, their potential to subvert their human counterparts, and the likelihood of younger generations to migrate towards these services through an expansive review of existing research on the subject. Finally, due to the complexity revolving around an ever-changing technological network and a continually evolving financial regulatory environment, future research should be aimed at exploring the impact of any new developments with robo-advisors from a generational trend, technological advancement, or regulatory change perspective.

Keywords

robo-advisors, wealth management, finance, millennials, investing, and financial advisors

Total Pages

23

Copyright

Copyright © 2019 Chase Rourke

COinS
 

URL

https://ir.uiowa.edu/honors_theses/308