The Securities and Exchange Commission will place an increased focus on automated investment advice in 2017, including “robo-advisers,” as part of its objective to protect retail investors, the agency said today.
Algorithm-powered robo-advice platforms like Wealthfront and Betterment have become extremely popular in the last few years, allowing consumers to manage their investment portfolio digitally, the SEC noted. The agency said that it will focus its examinations in this area on registrants’ compliance programs, marketing, formulation of investment recommendations, data protection and disclosures relating to conflicts of interest, as well as compliance practices for overseeing advice algorithms.
Other priorities for the SEC this year include focusing on senior investors and retirement investments, assessing market-wide risks, enhancing oversight of the Financial Industry Regulatory Authority and testing the implementation of cybersecurity procedures at broker-dealers and investment advisers.