Is Your Next Financial Adviser a Robot?

SMITH BRAIN TRUST – Are you ready to entrust your retirement savings to a robot? Investment advice is increasingly coming to clients from nonhuman sources, whether they realize it or not, as more money-management firms look to automated services to augment their team of human advisers and deepen the science behind stock-picking. Some firms are adopting hybrid services that couple algorithmic services with human advisers, creating a less-actively managed fund, often with a lower fee structure. But, at the same time, there is also a more deliberate move toward so-called robo-advisors, with some clients entrusting their savings to fully automated investment tools, replacing human advisers altogether. Alberto Rossi, assistant professor of finance at the University of Maryland's Robert H. Smith School of Business, has been studying the rise of robo-advice and its role in the financial industry.