From Tradition to Technology: the evolutions of Financial Advisory Services.

Abstract

This thesis explores the evolution of financial advisory, from its origins to the phenomenon of robo-advisory. The first chapter introduces the traditional financial advisory aiming to define the financial advisor and his role in the advisory process. A central theme of the thesis centers on the relationship between the financal advisor and its client, analyzing how the financial advisor has an influence on financial decisions of his customers. The second chapter revolves around the emergence of robo advisory, beginning with an overview with the fintech industry, its technological development and the ways it has transformed the sector of financial advisory. Furthermore the research analyzes the impact of robo advisory within the context of financial regulation, particularly focusing on the MiFID I and and MiFID II its implications for investor protection. Through an examination of investor behaviour and decision-making processes, the study considers factors such as risk disclosure and suitability assessments. In the third chapter, the concept of trust is examined by exploring how traditional financial advisors instill confidence in clients in comparison with the trust mechanisms employed by robo advisory platforms. As robo advisory platforms continue to gain prominence in the financial industry, understanding the dynamics of trust is essential for assessing their efficacy and acceptance. Finally the last chapter presents findings of original research aimed at exploring the potential of robo advisors to replace traditional financial advisors. Utilizing a mixed-methods approach, the study combines a questionnaire-based survey with a comprehensive review of existing literature to examine the attitudes, perceptions, and preferences of customers towards robo advisory and traditional advisory services.