Adoption of Robo-Advisory Services: Investor Awareness and Trust Perspectives

Abstract

This study investigates the determinants of robo-advisory service adoption among Indian retail investors, with a particular focus on the interrelated roles of investor awareness and institutional trust. Employing a mixed-methods sequential explanatory design, a structured survey instrument was administered to 412 retail investors across eight Indian cities, spanning metropolitan and tier-2 locations. Partial Least Squares Structural Equation Modelling (PLS-SEM) via SmartPLS 4.0 served as the primary analytical method, supplemented by descriptive statistics, correlation analysis, and qualitative expert interviews (n = 12). The study validated an original Awareness-Trust-Adoption (ATA) theoretical framework integrating the Technology Acceptance Model, UTAUT2, and institutional trust theory. All 15 hypotheses were supported at p ≤ 0.05. Investor awareness (β = 0.412, p < 0.001) and institutional trust (β = 0.381, p < 0.001) emerged as the strongest predictors of adoption intention, collectively explaining 62.3% of variance (R² = 0.623). Financial literacy significantly mediated the awareness-trust pathway (β = 0.287, p < 0.01), while perceived risk negatively moderated trust-to-adoption conversion (β = −0.271, p < 0.01). Significant sociodemographic disparities were documented across gender, geographic tier, age, and income segments. The findings provide empirically grounded implications for SEBI regulatory policy, robo-advisory platform strategy, and national investor education initiatives, contributing the first large-scale mixed-methods ATA framework validation in an emerging market fintech context.