Digital Adviser (Robo) Best Practices Survey

July 9, 2018

Digital advice is transforming areas of the financial advice industry. It is estimated that robo advisers will manage assets worth $2.2 trillion by 2020. 

It is becoming increasingly apparent that financial service firms are adopting digital advice solutions across the board. So, how do you stay ahead of the curve?

We want to create a set of compliance “best practices” for digital advisers to ensure that we can answer the question “What do you see other digital advisers doing?" The topics will cover:

  • Algorithm Testing
  • Risk Tolerance Questionnaire
  • Know Your Customer Information
  • Investment Company Act Rule 3a-4
  • Disclosures
  • Cybersecurity Governance
  • and More.

Participate in our Digital Adviser (Robo) Best Practices Survey here to gain insight into market trends and standards. Results will be presented this fall.

Why is this important?

On February 23, 2017, the US Securities and Exchange Commission’s (SEC’s) Division of Investment Management (IM) released IM Guidance Update 2017-02 which focuses on “robo-advisers” and three key areas:

  • disclosure
  • suitability
  • compliance programs

Around the same time, the SEC also issued an Investor Bulletin based on the issues and questions raised in the IM Guidance Update.

The SEC’s recent examination priorities include many topics directly applicable to robo-advisers. The 2017 priorities included electronic advice, wrap fee programs (robo-advisers are technically wrap fee programs) and never-before-examined advisers. Furthermore, its 2018 priorities include retail investors/retirement savings and cybersecurity.

Participate here.