OPPORTUNITIES OF DIGITAL FINANCIAL ADVICE PLATFORMS FOR PRIVATE INVESTORS: A QUALITATIVE CASE STUDY OF AMERICAN AND EUROPEAN COMPANIES’ PRACTICES

Valery Alferov, Nataliya Vysotskaya, Vitaliy Vernikov, Aleksandr Shelygov, Diana Stepanova

Abstract


Background: Technological innovations are already affecting financial markets and increasingly influence the terms of financial intermediation offers, including stock exchange instruments. The authors argue that analysis of the practice of digital financial advice platforms will improve the use of this innovation by many market participants. Objective: The article is devoted to one of the newest types of fintech – digital financial advice platforms (the so-called robo-advisors). The study aims to determine the functions, specifics of operation, and significance of digital financial advice platforms in the modern financial market through an examination of the practices of European and American companies. Methods: The authors performed a qualitative case study analyzing the practices of American and European companies. Eighteen digital financial advice platforms are selected and characterized based on information from their websites. Results: The differences are primarily found in the offer of investment plans, minimum investment amounts, and fees for advisory services. Conclusion: On the one hand, since the purpose of digital financial advice platforms is the management of clients’ investment portfolios, the development of robo-advisors offers excellent support to investors in the realization of their visions. On the other hand, these programs are not devoid of the mechanisms of working with the knowledge of investing and investor psychology, thereby forming the investor’s risk profile. Based on the risk profile of the investor, the program offers individual investment strategies.


Keywords


Fintech model; Robo-advisors; Virtual investment consulting

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References


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DOI: http://dx.doi.org/10.21902/Revrima.v5i38.6054

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