SEC Provides Guidance to Robo-Advisers and Investors

The SEC’s Division of Investment Management published a Guidance Update to robo-advisers that provided suggestions for how robo-advisers can address some of the unique compliance considerations and legal obligations they may have under the Investment Advisers Act of 1940.  The guidance focuses on robo-advisers that provide services directly to clients over the internet. The guidance discusses the following main issues: i) the substance and presentation of disclosures; ii) the provision of suitable advice; and iii) effective compliance programs.  In addition to the Guidance Update provided to robo-advisers, the SEC published an Investor Bulletin to educate investors on robo-advisers. Compliance Management members can find out more about this rule on RIAglass.

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