Robo-advisors and investment decisions: Assessing the impact of the “snakebite” effect and social-emotional well-being & resilience

Considering the snakebite effect experience of investors and their decision-making in the era of robo-advisors, this study focuses on examining the mediating role of the snakebite effect between the value of robo-advisors and investment decisions and assessing the moderation of social-emotional well-being and resilience among active investors. The research process began with an exhaustive review of existing literature and the development of a structured questionnaire. A further survey was undertaken by collecting 361 responses from active investors residing in the region of South India using robo-advisors, and finally, the mediation and moderation were analyzed utilizing confirmatory factor analysis (CFA) to check the model fit and Structural Equation Modelling (SEM) to test hypothetical relationships. The results validate the intervening role of the Snakebite Effect in the relationship between the value of Robo-Advisors and investment decision-making. Further, social emotional well-being and resilience of investors significantly lessen the negative impact of the snakebite effect on investment decision-making. The role of social-emotional well-being and resilience is vital as high tendency leads to a low snakebite effect, better effectiveness of robo-advisors, and investment decision-making. This study provides various theoretical, practical, and managerial implications for improved robo-advisory services and increased adoption among diverse investor segments. In particular, the study emphasizes that financial institutions should focus on hybrid advisory models that combine the analytical capabilities of robo-advisors with the empathetic, personal touch of human advisors.