Browse Definitions:
Definition

robo-advisor

Contributor(s): Matthew Haughn

A robo-advisor is an artificial intelligence (AI) driven virtual financial advisor. Robo-advisors are a type of expert system optimized for financial services.

A robo-advisor is one example of a software robot, not a physical robot and therefore not technically a robot at all. However, the software supporting robo-advisors does function similarly to the AI that might drive a robot. Investors communicate with their robo-advisors through smartphone apps or over the web.

The software can choose stocks for portfolios according to the balance desired by clients and provide limited financial advice. Like other expert systems, robo-advisors use AI technologies in conjunction with a knowledge base to simulate the judgment and behavior of an experienced human with specialist-level knowledge in a particular field.

Financial institutions can save money by employing virtual assistants to deal with relatively simple requests and pass on more complex requests to human advisors. Human agents themselves often use robo-advisors to respond more quickly to customer requests.

Given that financial advisors are typically well-paid, the software is relatively inexpensive to acquire and maintain. Many in the financial sector also see robo-advisors as a means of getting investing advice to the masses, with associated cost savings. It’s also thought that robo-advisors could promote financial literacy because investors might take more time to explore options without feeling the pressure to make a decision that they might feel dealing with a human.

See an introduction to robo-advisors:

This was last updated in December 2016

Continue Reading About robo-advisor

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • internal audit (IA)

    An internal audit (IA) is an organizational initiative to monitor and analyze its own business operations in order to determine ...

  • pure risk (absolute risk)

    Pure risk, also called absolute risk, is a category of threat that is beyond human control and has only one possible outcome if ...

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

SearchSecurity

  • computer exploit

    A computer exploit, or exploit, is an attack on a computer system, especially one that takes advantage of a particular ...

  • cyberwarfare

    Cyberwarfare is computer- or network-based conflict involving politically motivated attacks by a nation-state on another ...

  • insider threat

    Insider threat is a generic term for a threat to an organization's security or data that comes from within.

SearchHealthIT

SearchDisasterRecovery

  • business continuity and disaster recovery (BCDR)

    Business continuity and disaster recovery (BCDR) are closely related practices that describe an organization's preparation for ...

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • call tree

    A call tree -- sometimes referred to as a phone tree -- is a telecommunications chain for notifying specific individuals of an ...

SearchStorage

  • OpenStack Block Storage (Cinder)

    OpenStack Block Storage (Cinder) is open source software designed to create and manage a service that provides persistent data ...

  • SATA Express (SATAe)

    SATA Express (SATAe or Serial ATA Express) is a bus interface to connect storage devices to a computer motherboard, supporting ...

  • DIMM (dual in-line memory module)

    A DIMM (dual in-line memory module) is the standard memory card used in servers and PCs.

SearchSolidStateStorage

  • hybrid flash array

    A hybrid flash array is a solid-state storage system that contains a mix of flash memory drives and hard disk drives.

  • 3D XPoint

    3D XPoint is memory storage technology jointly developed by Intel and Micron Technology Inc.

  • RRAM or ReRAM (resistive RAM)

    RRAM or ReRAM (resistive random access memory) is a form of nonvolatile storage that operates by changing the resistance of a ...

SearchCloudStorage

  • Google Cloud Storage

    Google Cloud Storage is an enterprise public cloud storage platform that can house large unstructured data sets.

  • RESTful API

    A RESTful application program interface breaks down a transaction to create a series of small modules, each of which addresses an...

  • cloud storage infrastructure

    Cloud storage infrastructure is the hardware and software framework that supports the computing requirements of a private or ...

Close