AI-Powered Robo-Advisors: Transforming Investment Decision-Making and Portfolio Management

Abstract

The advent of artificial intelligence (AI) based robo-advisor has become a disruptive game-changer in the field of investment advisory service, altering the manner in which portfolios are managed as well as how individuals are making investing choices. These platforms provide cost-efficient, personalized and scalable financial recommendations using Big data analytics, machine learning, and algorithmic automation. The paper is a systematic literature review carried out with the help of PRISMA to draw generalizations on the available literature on the topic of AI-powered robo-advisors, the basics behind their technology, the impact on investor behavior, the performance of their portfolios, and the ethical and regulatory issues related to this field. Based on the searches of peer-reviewed published literature published in 2016-2025, the review determines the main themes in the context of decision accuracy, reduction of behavioral bias, risk optimization, and democratization of financial advice. The results reveal that the efficiency and objectiveness of investment management is considerably increased by robo-advisors, but the issues of data privacy, algorithmic transparency, and regulation are raised. The paper concludes that hybrid advisory models that integrate AI with the human judgment skills are the most sustainable future of the investment advisory services. New issues of data privacy, algorithmic transparency, ethical fairness, and regulatory compliance are critically looked into as well as those benefits such as automation, objectivity, accessibility and democratization of financial advice are identified. It argues in the study that hybrid models of advising that integrate AI capabilities with human decision-making will probably Explain the future of the investment guidance services utilising real case studies and research that is currently available.