Robo-Advisor Introduction

What is Robo-Advisor?

Robo-advisors or Robo-advisers are a class of financial adviser that provide financial advice or portfolio management online with moderate to minimal human intervention. -Wikipedia

Robo-advisor (A.K.A. Intelligent Investment) can provide automated investment management services, which requires little or low human interactions once the clients ensure their initial preferences.

Here is a PowerPoint about the introduction of Robo Advisor:

General Process & Mechanism of Robo-Advisor

Risk Tolerance Questionnaire (RTQ)

RTQ is a questionnaire about customers’ personal financial goals and tolerance for risk.

Rebalancing Process

  • Robo provides asset allocation and investment selection.

  • Automatic deposits from payroll, systematic investment plans, and automatic rebalancing

  • The robo-advisor software will make periodic adjustments over time.

Theories & Techniques

Modern Portfolio Theory

  • Input: User Info;
  • Output: Portfolio;
  • Mean-Variance Optimization

Deferential Manifold and Topology

  • Use tensor to describe the portfolio space;
  • Find topological invariant and predict;
  • Deferential Manifold;

Machine Learning

  • Random effect function

  • Reinforcement learning


  • Risk Management

  • Mutual Fund

  • FOF product

  • Diversified Investment:

— Passive management: mainly index fund or ETF (Exchange-Trade Funds)

— Stocks, bonds, mutual funds, futures, and real estate may be used

Websites about Robo Advisor

  1. nerdwallet-investing
  2. investmentzen-best robo advisor

Independent Robo-Advisors (Overseas)

  1. Betterment
  2. Wealthfront
  3. Personal Capital
  4. Sigfig
  5. Vanguard
  6. Rebalance IRA
  7. WiseBanyan
  8. Wealthsimple
  9. Blooom
  10. Schwab Intelligent Portfolios
  11. Ally:TradeKing Advisor
  12. Hedgeable
  13. FutureAdvisor
  14. Motif Investing
  15. TD Ameritrade
  16. Merill Edge
  17. ETRADE
  18. Acorns
  19. Eoption
  20. tradestation
  21. InteractiveBrokers
  22. Fiedelity GO
  23. Alpha Architect Robo
  24. Cambria Digital Advisor

Independent Robo-Advisors (Domestic)1

  1. Ant Group: iGoldenBeta
  2. 招商银行:摩羯智投
  3. 金融界:灵犀智投
  4. 宜信财富:投米RA
  5. 理财魔方
  6. 蛋卷基金
  7. 平安壹账通:智能财富管家
  8. 华夏银行智能投顾


  1. Optimal investment strategy to non-professional investors
  2. Customized
  3. Automation
  4. Low commission fee


No too much AI&Big Data yet in the industry (Speech Recognition, Big Data)

Academic Readings

  1. Moody, J., Wu, L., Liao, Y., & Saffell, M. (1998). Performance functions and reinforcement learning for trading systems and portfolios. Journal of Forecasting, 17(56), 441-470.
  2. Neuneier, R., & Mihatsch, O. (1999). Risk sensitive reinforcement learning. In Advances in Neural Information Processing Systems (pp. 1031-1037).
  3. Dempster, M. A., & Jones, C. M. (2001). A real-time adaptive trading system using genetic programming. Quantitative Finance, 1(4), 397-413.
  4. Li, B., & Hoi, S. C. (2014). Online portfolio selection: A survey. ACM Computing Surveys (CSUR), 46(3), 35.
  5. Galindo, J., & Tamayo, P. (2000). Credit risk assessment using statistical and machine learning: basic methodology and risk modeling applications. Computational Economics, 15(1), 107-143.
  6. Dempster, M. A., & Leemans, V. (2006). An automated FX trading system using adaptive reinforcement learning. Expert Systems with Applications, 30(3), 543-552.
  7. Nevmyvaka, Y., Feng, Y., & Kearns, M. (2006, June). Reinforcement learning for optimized trade execution. In Proceedings of the 23rd international conference on Machine learning (pp. 673-680). ACM.
  8. Jiang, Z., & Liang, J. (2016). Cryptocurrency Portfolio Management with Deep Reinforcement Learning. arXiv preprint arXiv:1612.01277.
  9. Moody, J. E., Saffell, M., Liao, Y., & Wu, L. (1998, August). Reinforcement Learning for Trading Systems and Portfolios. In KDD (pp. 279-283).

Non-academic Readings

  1. ACCENTURE: The Rise of Robo-Advice: Changing the Concept of Wealth Management
  2. CGI: [Beyond Robo-Advisors:Using Technology to Power New Methods of Client Advice and Interaction]
  3. Deloitte: Robo-Advisory in Wealth Management
  4. IPSOS: Robo-advisors: the rise of automated financial advice
  6. Wealthfront Investment: Methodology White Paper
  7. Betterment - White Paper: Tax Loss Harvesting+™
  8. Schwab - Rebalancing and Tax-Loss Harvesting in Schwab Intelligent Portfolios™

Casual Readings

  1. 知乎:智能投顾是什么?「智能」体现在哪些方面?
  2. 一文读懂智能投顾的商业逻辑和模型算法
  3. 知乎:什么是智能投顾?
  4. 华尔街见闻:智能投顾是怎样炼成的?
  5. 知乎LIVE:智能投顾是什么?
  6. CNBC: Goldman building robo-adviser to give investment advice to the masses
  7. CNBC: Machine learning is transforming investment strategies for asset managers
  8. American Banker: Beyond Robo-Advisers: How AI Could Rewire Wealth Management
  9. The Economist: Ask the algorithm
  10. Quora: Is there any hedge fund using Machine learning based algorithms for trading?
  11. Quora: Can deep reinforcement learning be used to make automated trading better?
  12. INSIGHT: Machine Learning in Finance: Is a Robo-Advisor Smart Enough to Invest Your Savings?
  13. NerdWallet: Best Robo-Advisors: 2017 Top Picks
  14. INVESTOPEDIA: 9 Top Robo-Advisors for Financial Advisors
  15. StackExchange:Which algorithms do robo-advisors use?
  16. Mr Money Mustache Blog: The Betterment Experiment – Results
  17. NerdWallet: Best Online Brokers for Stock Trading 2017
  18. The Balance: A Look at the Top Robo-Advisor Services
  19. Artificial Intelligence led disruption in Trading
  20. How Machine Learning Is Helping Morgan Stanley Better Understand Client Needs

Possible Topics

A. Market/Strategy

  • Survey of Robo-Advisor Market and its impact

B. Technology

  • Portfolio Management view of Robo-Advisor
  • In-depth exploration of Robo-Advisor framework

C. Statistics/Data Analysis

  • Trend analysis of Robot-Advisor

D. Behavior

  • Survey: How do human trust Robo-Advisor?
1. 中国智能投顾行业2017年8月发展月报
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