Robo-advice alert issued in the US

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Financial regulators in the US are warning investors and advisers to beware the limitations of automated investment tools.

Generic economic assumptions, framed questions and de-personalised recommendations that do not properly take into account changing circumstances or investment time horizons are among the concerns identified in an alert issued by the Securities and Exchange Commission and Financial Industry Regulatory Authority. Automated investment platforms are part of the ‘robo-advice' sector in the US, though they are also being used by client-facing advisers as supplementary tools to guard against losing business to the traditional robo-advice giants, such as Betterment and Wealthfront. Related ...

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