Robo-advice alert issued in the US

clock

Financial regulators in the US are warning investors and advisers to beware the limitations of automated investment tools.

Generic economic assumptions, framed questions and de-personalised recommendations that do not properly take into account changing circumstances or investment time horizons are among the concerns identified in an alert issued by the Securities and Exchange Commission and Financial Industry Regulatory Authority. Automated investment platforms are part of the ‘robo-advice' sector in the US, though they are also being used by client-facing advisers as supplementary tools to guard against losing business to the traditional robo-advice giants, such as Betterment and Wealthfront. Related ...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Technology

Close Brothers partners with technology firm SEI for platform offering

Close Brothers partners with technology firm SEI for platform offering

Several CBAM employees to join SEI’s operations as part of agreement

Isabel Baxter
clock 07 November 2024 • 1 min read
What will the FCA's AI Lab mean for the wealth management industry?

What will the FCA's AI Lab mean for the wealth management industry?

Risk comes in how and where AI is deployed by wealth managers

Carl Woodward
clock 06 November 2024 • 4 min read
'Advice is on the brink of a tech-driven revolution'

'Advice is on the brink of a tech-driven revolution'

It’s advisers - armed with empathy and innovation - who will lead the charge

Tessa Lee
clock 04 November 2024 • 3 min read