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Félix E Mezzanotte, An examination into the investor protection properties of robo-advisory services in Switzerland, Capital Markets Law Journal, Volume 15, Issue 4, October 2020, Pages 489–508, https://doi.org/10.1093/cmlj/kmaa024
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1. Introduction
Robo advisers (RAs) are companies that provide portfolio management and investment advice services using algorithms and digital platforms displayed in the internet and/or mobile phone applications.1 The term ‘robo’ connotes the presence of artificial intelligence making decisions on service provision (eg recommending investment products to customers). In the purest form of RAs, the service is fully automated and delivered online without the need for any corporate officer or employee to interact directly with the customers. It has often been the case, however, that robo-advisory services have involved some form of human interaction such as offering customer services via a phone call or e-mail.2 RAs have become an increasingly influential, disruptive force in the asset management industry.3
Assets under the management of RAs will reach US$1.1 trillion in 2020. With an estimated yearly growth of 26 per cent, the industry is expected to manage US$2.75 trillion in 2024. The lead provider of robo-advisory services has been the USA (US$683 billion) followed by China (US$88 billion).4 The Swiss robo-advisory industry has grown substantially in recent years to become one of the top five providers worldwide (US$23 billion).5 Despite their increasing stature, little has been known about Swiss-based RAs. A review of current literature conducted for this research identified a study on Fintech in Switzerland looking at, among other issues, market developments and trends on RAs.6 Websites providing comparative data on RAs, such as fees and charges, were also detected.7 Aside from these resources, no enquiry was found into the investor protection properties of robo-advisory services. Therefore, this article set out to investigate the extent to which the information provided by Swiss-based RAs on their websites has been conducive to retail investor protection.8
