AI Investment Advisory: Examining Robo-Advisor Adoption Using Financial Literacy and Investment Experience Variables

Artificial intelligence–AI advancement in the financial sector to support investment management, digital investment advisers can support making better decisions by providing investment recommendations for diversified investment portfolios using machine learning algorithms. There is an increasing demand for investment advisors’ knockout innovations in the financial industry, where a portfolio is managed through artificial intelligence and machine learning algorithms. This research seeks to establish the effect of investor competency in financial literacy and investment expertise on using digital investment advisors. An analysis of ten core articles, from 2019 to 2024, is demonstrated in this study through a systematic literature review, which applied the PRISMA guidelines approach. Key aspects arose as critical to investment portfolio and advisory decisions. These determined aspects are used in different sorts of investment portfolios and to optimise the performance of digital investment advisors. The findings of this study show that financial literacy increases by controlling variables, such as education, trust, and perceived ease of using digital investment advisors that support investors in managing their financial investment. At the same time, investment experience improves the use of expert advice about fine-tuning portfolio selections and cracking automated advice. Nevertheless, low financial literacy, even amongst small investors, is still a potent issue. These findings suggest that future research should incorporate education tools, hybrid advisory systems and platforms, and behavioural finance interventions to counter such adoption factors.