FaIR seminar: Robo-advisors

The « Finance and Insurance Reloaded » (FaIR) Interdisciplinary Research Program (IRP) of the Institut Louis Bachelier targets to foster innovations driven by new technologies (from Artificial Intelligence to blockchains) in the financial and insurance sectors. One component of this program is a series of workshops hosted by the ACPR.

 

We have dedicated the next workshop to « Robo-Advisors ».

Two key speakers will present their recent research:

• Marie Brière (Head of Investor Research Center at Amundi and Affiliate Professor at Paris Dauphine University) on behavior of investors using robo-advisors.
• Agostino Capponi (associate professor in the Industrial Engineering and Operations Research Department at Columbia University, and a member of the Columbia Data Science Institute) on technical means to capture and use investment goals to build investment strategies.

The roundtable will be moderated by Mark Sinsheimer (Consultant) and our speakers will be joined by

• Jean-Philippe Barjon (Head of Coordination for Sales Management Supervision, ACPR)
• Claudia Guagliano (European Securities and Markets Authority (ESMA), Team Leader  – Innovation and Products, Risk Analysis and Economics Department)
• Lukasz Szpruch (Associate Professor at the School of Mathematics, University of Edinburgh and Turing Fellow at The Alan Turing Institute)
• Philippe Maupas (Co-founder of Alpha & K and blogger)
• David Furcajg (CEO HighWave Capital)

 We expect to cover at least three main themes :

• Could this technology counter some bad behavioral biases?
• How could these platforms change business models and lead to more independence of the distribution channels?
• Should the regulation evolve to answer specifically to robo-advisors?

 

Very successful applications of machine learning and artificial intelligence (AI) have targeted client experience (for marketing and advertising purposes) and optimization of trajectories (for navigation software). This development makes it natural to think about addressing the trajectories of portfolios, customized on a client-by-client basis, such as applications in asset management. A robotization of financial advisory enforces the demand for tools that provide well-defined exposures to risk factors. The increase in factor investments and the creation of associated Exchange-Traded Funds (ETF), in particular since 2010, for sure contributed to the feasibility of Robo-Advisors. Today companies offer not only single shot advice, but are providing a suite of tools allowing investors to continuously monitor their portfolio under a set of investment goals. This raises academic questions in various directions such as: What is the definition and correct use of « investment goals »? Can assistance provided by these robots prevent known behavioral biases? Are there perfect tools for financial education? 

 

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