Robo-advisers vs human managers: Who wins?

Subject. The article considers the collective investment market in the context of the digital transformation of financial advisory and asset management services. Objectives. The purpose of the study is to identify advantages and disadvantages of robo-advisors and human managers, to develop recommendations for investors on choosing the optimal asset management strategy, to offer ways to improve the performance of both systems. Methods. We use methods of comparative analysis, including the assessment of operational and financial efficiency, the analysis of behavioral aspects of investor interaction with robo-advisors and human managers. The study rests on data from international and Russian companies providing asset management services. Results. The findings showed that robo-advisors demonstrate lower fees and high data processing speed, which makes them attractive to the mass segment of investors. However, human managers are superior to robots in adaptability to crisis situations and personalization of services, which is especially important for the premium segment. Hybrid models combining algorithmic solutions with human control showed the greatest efficiency. Conclusions. The future of asset management lies in the synthesis of technology and human expertise. Hybrid models combining the advantages of robo-advisors and human managers can be the most effective solution for investors in an unstable economic environment. The findings can be useful for investors to choose the optimal asset management strategy, and for management companies to improve their services. They may be also useful to regulators and financial technology developers.