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

FCA to support firms to overcome challenges in implementing AI

FCA to support firms to overcome challenges in implementing AI

Regulator launches an ‘AI Lab’

Isabel Baxter
clock 17 October 2024 • 3 min read
Scenario planning: Lessons from the CrowdStrike outage

Scenario planning: Lessons from the CrowdStrike outage

How can we prepare for potential similar outages in the future?

Ollie Dent
clock 07 October 2024 • 4 min read
Real-time evaluation: Let AI be your portfolio's personal trainer

Real-time evaluation: Let AI be your portfolio's personal trainer

Technology is transforming the landscape of portfolio management

Tony WIlkinson
clock 03 October 2024 • 3 min read