Dynamics of Robo-Advisory Financial Services in Australia

Purpose: The advantages and limitations associated with robo-advisory services is examined and presented the current state of the robo-advisory industry in Australia. In addition, financial performance is assessed by using multiple indicators from 2018 to 2028. A narrative synthesis of the current literature is guided to identify the benefits and disadvantages of robo-advisory services by a comprehensive analysis.Design/Methodology/Approach: The performance and structure of the robo-advisory industry in Australia also is examined by performs a secondary data analysis. Most empirical work on robo-advisory services still have focused on the United States, Europe and Asian Market. Robo-advisory services are providing many benefits such as Australian investors cost saving, ease accessibility and scalability, automation, improved risk profiling and a more comprehensive objectivity as compared with traditional advice.Findings: Algorithmic bias, a lack of consumer trust and clearness, regulatory compliance obligations under the Australian Securities and Investments Commission (ASIC) regime, data privacy and related to cybersecurity, and limited financial knowledge among its potential users were identified as the principal limitations. The Australian Robo-advisory within the broader Australia and Oceania fintech market is forecast to grow from an estimated US$83.2 million in 2024 to approximately US$106.3 million in 2028.Implications/Originality/Value: The study suggests continued regulatory improvement of ASIC's Regulatory Guide 255 (RG 255) bring greater investment in algorithmic and customer training, and closer incorporation of robo-advice with Australia's compulsory retirement savings framework such as superannuation system for long-term sustainability of this sector.