Earlier this year, the Securities and Exchange Commission (SEC) issued guidance regarding “robo-advisers,” automated investment advice tools accessed via web-based or mobile platforms with minimal human interaction. The guidance is an important reminder to the industry that robo-advisers are subject to the same regulatory framework as traditional advisers and highlights several unique regulatory considerations stemming from their distinct business model.
The SEC also, for the first time, included these considerations as a part of this year’s examination priorities. To comply, robo-advisers should review their investment models, customer questionnaires, and disclosures. Robo-advisers should further ensure that their compliance programs adequately address the unique circumstances associated with robo-advice such as cybersecurity and model governance.
This Regulatory Brief examines the SEC’s focus areas for robo-advisers and provides recommendations for developing robo-adviser compliance programs.
A publication of PwC's financial services regulatory practice
Financial Services Advisory Leader, PwC US
Tel: +1 (646) 471 4771