Financial attributes, financial behaviors,<scp>financial‐advisor‐use</scp>beliefs, and investing characteristics associated with having used a<scp>robo‐advisor</scp>

Todd, Timothy M.; Seay, Martin C.

doi:10.1002/cfp2.1104

Cited by 12 publications

(9 citation statements)

References 19 publications

(41 reference statements)

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“…A positive relationship was observed between perceived financial knowledge and the adoption of financial robo‐advisors. This finding parallels those from prior studies (Fan & Chatterjee, 2020 ; Todd & Seay, 2020 ), which indicated a similar positive association; albeit, the contexts of critical situations such as the COVID‐19 pandemic were not considered in those studies. In the context of this study, we argue that consumers with high financial knowledge might have more awareness about how robo‐advisory processes are conducted through unbiased AI algorithm operations; and this, in turn, elevated their intention to adopt financial robo‐advisors.…”

Section: Discussionsupporting

confidence: 88%

“…In the case of robo‐advisors, Brenner and Meyll ( 2020 ) found that objective financial literacy levels are lower for the users of robo‐advisors. Similarly, Todd and Seay ( 2020 ) demonstrated that those who scored high in objective investment knowledge were less likely to use robo‐advisors; inversely, those with higher subjective financial knowledge showed a higher willingness to use robo‐advisors. Perceived financial knowledge was a positive contributor to the adoption of robo‐advisor platforms (Fan & Chatterjee, 2020 ).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 94%

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Understanding consumer's adoption of financial robo‐advisors at the outbreak of the COVID‐19 crisis in Malaysia

2021

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The COVID‐19 crisis that resulted in diminished close contact interaction and increased financial volatility could influence consumer's perception toward online automated financial robo‐advisor, in order to manage their financial planning. Based on the data collected (i.e., between February [9 reported cases] and March [36 reported cases] 2020) within the developed urban cities in Malaysia just before the nationwide lockdown, the present study examines the antecedents of financial robo‐advisor's adoption during the COVID‐19 crisis. A variance based analysis shows that consumers with higher financial knowledge and having a greater tendency to rely on robo‐advisor tend to adopt financial robo‐advisor in times of crisis. In line with the unified theory of acceptance and use of technology model, performance expectancy, social influence, and trust in robo‐advisor, in particular during the pandemic, drive consumer's intention to subscribe online financial robo‐advisor. The findings imply how consumers, robo‐advisory service providers, and regulators could respond to unprecedented crisis such as novel corona virus‐19.

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Section: Discussionsupporting

confidence: 88%

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 94%

Understanding consumer's adoption of financial robo‐advisors at the outbreak of the COVID‐19 crisis in Malaysia

2021

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“…Prior studies have looked at human-AI collaboration and suggested AI as well as roboadvisors as effective ways of dealing with human cognitive biases. However, literature showed that robo-advisors have limitations and are therefore not very successful (Todd & Seay, 2020;Northey et al, 2022). Our research provides an advanced AI solution to specifically overcome hindsight and confirmation biases through a backpropagation model.…”

Section: Implications Theoretical Implicationsmentioning

confidence: 97%

“…Moreover, Robo-advice efficiently collects information from the clients and processes this information for decision-making purposes (Brenner & Meyll, 2020). However, the limitation of using Robo-advice is that most clients want their services from actual financial planners, not directly from computers or robots (Todd & Seay, 2020;Northey et al, 2022;Athota et al, 2023).…”

Section: Literature Reviewmentioning

confidence: 99%

Can Artificial Intelligence (AI) Manage Behavioural Biases Among Financial Planners?

Hasan

Vaz

Athota

et al. 2023

Journal of Global Information Management

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The main novelty of this paper is proposing artificial intelligence (AI) to manage behavioural biases in the financial decision-making process. An empirical study by Kahneman and Tversky identifies the evidence of behavioural biases in the investment decision-making process: a reversal of an established tenet in traditional finance. Financial planners are vulnerable to behavioural biases and are therefore unable to provide optimal investment solutions for their clients. Identifying the limitations of current practice, this research attempts to address how AI can help financial planners in subduing their behavioural biases and proposes the adoption of AI in financial planning services to circumvent behavioural biases. In recent years, AI has attained significant efficacy and has proven to be efficacious through supervised and unsupervised learning. Applying these AI techniques in mitigating behavioural biases, this study confirms that the backpropagation within the neural network and deep reinforcement learning can help overcome confirmation and hindsight biases.

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“…Moreover, intrinsic drivers, especially in the case of crowdfunding include pro-social and altruistic behavior (Guidici et al, 2018;Cholakova and Clarysse, 2015), sensation-seeking attitude and excitement to participate in P2P lending (Demir et al, 2021;Daskalakis and Yue, 2018), and distrust in banks (Saiedi et al, 2020). In terms of the use of personal wealth management fintech solutions, such as the use of robo-advisors, several studies find perceived complexity and effectiveness (PwC, 2019), age and gender (David and Sade, 2019;Todd and Seay, 2020), self-assessed financial experience (Hohenberger et al, 2019), income, and subjective and objective financial knowledge (Fan and Chatterjee, 2020;Todd and Seay, 2020), and social influence and trust (PwC, 2019;Gan et al, 2021) as determinants of robo-advisor adoption.…”

Section: Introductionmentioning

confidence: 99%

Adoption of fintech services: role of saving and borrowing mechanisms

2021

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This paper investigates the relationship between an individual's saving and borrowing practices and his/her propensity to use fintech services. More particularly, we examine whether having multiple saving and borrowing channels increases a person's likelihood to participate in online funding platforms, and use robo-advisors. Using a sample of over 2000 respondents to a survey we conducted in Malaysia, our main results indicate that individuals who save and borrow via multiple channels, and through external conduits, are more likely to use fintech services than their counterparts. This is consistent with the view that individuals who use multiple saving and borrowing conduits are more likely to perform mental accounting, a concept which is commonly used by fintech companies to facilitate personal wealth management. Further, our findings reveal that among respondents with multiple saving channels, those who put less importance on trust in financial products, and consider financial returns essential, are the most likely users of fintech services. Overall, our findings offer new insights by providing a better understanding of the factors that foster the use of fintech services.

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Financial attributes, financial behaviors,financial‐advisor‐usebeliefs, and investing characteristics associated with having used arobo‐advisor

Cited by 12 publications

References 19 publications

Understanding consumer's adoption of financial robo‐advisors at the outbreak of the COVID‐19 crisis in Malaysia

Understanding consumer's adoption of financial robo‐advisors at the outbreak of the COVID‐19 crisis in Malaysia

Can Artificial Intelligence (AI) Manage Behavioural Biases Among Financial Planners?

Adoption of fintech services: role of saving and borrowing mechanisms

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