A new creative destruction in the age of artificial intelligence: The rise of financial advisor robots

Abstract

This chapter examines how robo- advisors are reshaping traditional financial advisory models considering the fundamental transformation that artificial intelligence and automation have created in the financial services industry. Robo- advisors enable financial markets to be more accessible to the masses and democratize investment processes by providing low- cost and accessible services. These systems, which offer personalized portfolios according to individual risk tolerance and investment goals, ensure individual investors to achieve their financial goals more effectively. This chapter emphasizes that robo- advisors create a new paradigm shift in the financial sector within the framework of Schumpeter's concept of creative destruction, while discussing the challenges these technologies face in terms of cybersecurity and transparency. Moreover, in the future, robo- advisors are predicted to have significant potential in areas such as more personalization, more integrated services, and advanced data security.