The promises and perils of robo-advisers: Challenges and regulatory approaches

• Main Authors: Aurelio GURREA-MARTINEZ, WAN, Wai Yee
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2021
• Subjects: AI; financial services; robo-advisers; investment advice; financial advise; access to finance; Science and Technology Law
• Online Access: https://ink.library.smu.edu.sg/sol_research/3459; https://ink.library.smu.edu.sg/context/sol_research/article/5417/viewcontent/SSRN_id3931448.pdf
• Institution: Singapore Management University

Artificial intelligence is changing the operation and business model of many intermediaries in financial markets. Investing through online automated platforms, known as robo-advisers, is becoming very popular worldwide. In fact, some studies estimate that robo-advisers will be managing USD 4.6 trillion by 2022. This chapter analyses the promises and perils of robo-advice, as well as the challenges and regulatory responses adopted in various countries and regions around the world, including the United States, the United Kingdom, the European Union, Australia, Hong Kong, Mainland China, and Singapore. It will conclude by showing that, despite the existence of various legal and challenges that need to be addressed, robo-advisers are expected to play a significant role in the future of the financial sector by reducing the costs of investment and wealth management services, and democratizing access to capital markets.