Robotic Financial Advisors: Regulatory Interactions to an Emerging Alternative to Investment Provision

Robotic financial advisors (robo-advisors) have emerged as a purported low-cost and low-hassle alternative to traditional investment advisers and broker-dealers.This type of advisor assists financial institutions in employing asset-allocation models and algorithms to invest client portfolios, typically in exchange-traded funds.In this paper, we focus on reviewing the current state of the art in the provision of financial advice and discuss how regulatory agencies have interacted with aspects of robo-advising.