The Evolution of Wealth Management: Transformation and Innovation of Robo Advisory

Abstract

The main ambition of this work is to present and outline in the most effective way possible the ongoing transformation of wealth management industry. Primary emphasis is placed on the digitalization that is hitting the sector. Such evolution is driven mostly by the automatization of investing processes based on algorithmic solutions known as robo advisors. In this dissertation first chapters focus on traditional wealth services whereas the central section reckons with robo advisory systems, inquiring how do they work and why they may be considered a disruptive innovation. A comparative analysis is left as conclusion; the basic idea is to investigate whether passive strategies carried out, with the assistance of artificial intelligence solutions are able to create value to common investors, related to the service offered by professional human advisors. Similarly, this thesis strives also to investigate the potential effects of massive automatization on the markets and ultimately define, if possible, the optimal structure for a robo advisor.