Brooke Southall

Technology is now regulated de facto by virtue of our regulated clientele. The SEC, FINRA and other regulatory bodies have found an effective backdoor solution to regulate the fintech industry. If you as a technology provider think otherwise then think again.

"The underlying premise of the Investment Advisers Act is to 'say what you mean and do what you say,'" he says.  "Silicon Valley, however, tends to build the feature list and eventually backfill the technology platform with the functionality.

[ No different for some big RIAs that think they are technology platforms ]

SEC clobbers Wealthfront on multiple alleged offenses; settles case with 'cease and desist' order, $250,000 fine

Wealthfront

<p>The past two years have been some of the most momentous in the relatively short history of the RIA profession. Legislators and regulators have been gradually embracing the fiduciary standard, though whether it will fully apply to everyone calling themselves advisors remains to be seen.</p>

<p>The Department of Labor’s crusade to lower costs and increase transparency in retirement plans means a spate of new regulations affecting advisors and brokers in that market. Dodd-Frank Financial Reform, meanwhile, continues to unroll across the profession, with the biggest change being a shift to state oversight of RIAs with less than $100 million AUM. In this section, you’ll find continually updated RIABiz.com coverage on all these topics.</p>

RIA Compliance

Stripped down to its essentials, financial advice is a fairly straightforward proposition. Done well, a highly ethical individual stewards the assets and actions of an investor in a personal and professional interchange.
 
But now a vibrant new class of entrepreneurs is staking their fates and their fortunes on the premise that financial advice can be delivered in a better, cheaper, easier, more ethical, more transparent manner and, as a bonus, in a way more devoid of human annoyance on both ends of the transaction.
 
Cue the robo-advisors, arguably a callous misnomer for automated asset management. 
 
The prototypical robo-advisory entrepreneur has more brands on his or her resume than NASCAR. The bona fides of these industry upstarts often include Ivy-level colleges and MBA programs at Harvard or Stanford. They are often flush with IPO dollars realized at concerns like LinkedIn, Facebook, eBay, Amazon  and Microsoft. 
 
Robo-folk believe that technology is not an enabler of advice but rather, if engineered correctly, advice itself in digital form. 
 
And, they believe the best solutions originate in Silicon Valley or academia, not Wall Street. Robo-entrepreneurs are white-boarding the whole business model, culture and technology from scratch in the conviction that little can be learned from a legacy advice system still rooted in an investment banking culture acting under the core premise that if stockbrokers get rich some of the good effects will trickle down to clients – with the clients none the wiser. 
 
Robo-advisors are a scintillating topic for students of the advice game as they grow by hundreds of millions in assets every month, constantly evolve their business models and receive cash infusions from ever-larger swaths of venture capitals.
 
Throw in the fact that robo-advisors have yet to see a dime in profits -- and won’t in the foreseeable future -- and you have real intrigue. 
 
RIABiz has avidly covered the fast-evolving robo-advice phenomenon and will continue to do so. We present the growing body of articles here.

Robo-Advisors

The big charge relates to tax-loss harvesting but Tweeting testimonials also comes into play

SEC clobbers Wealthfront on multiple alleged offenses; settles case with 'cease and desist' order, $250,000 fine

Peter Giza

Steve Redding

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SEC clobbers Wealthfront on multiple alleged offenses; settles case with 'cease and desist' order, $250,000 fine

Peter Giza

Steve Redding

Related Moves

June 29, 2024 at 3:00 AM

June 7, 2024 at 1:44 AM

August 14, 2021 at 2:20 AM

December 31, 2020 at 4:37 AM

RIABiz Directory

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