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

AI 'trust gap' causing uptake of robo-advisers to remain limited

AI 'trust gap' causing uptake of robo-advisers to remain limited

Clients still lack trust in the technology, Avaloq finds

Isabel Baxter
clock 20 November 2024 • 2 min read
Advice firms only spending 35% of time on client meetings

Advice firms only spending 35% of time on client meetings

Spending more time on business, compliance and staff development

Isabel Baxter
clock 18 November 2024 • 2 min read
PFS Conference 2024: AI should augment not replace human element in advice

PFS Conference 2024: AI should augment not replace human element in advice

Firms that adopt technology to save time will improve client experience

Jenna Brown
clock 14 November 2024 • 2 min read