Regulations for Robo-Advisors

In this chapter, we’ll bring our journey together to a close by addressing a crucial topic for anyone interested in building and operating a Robo-advisor in regulations. This issue has been an area of active development since the global financial crisis of 2008 and the launch of the first Robo-advisors soon thereafter. Regulators wish to see Robo-advisors contributing positively to the financial services industry by using the opportunities offered by a digital experience to further investor protections and increase transparency on pricing. The issues are certainly made more challenging by the diversity of regulations and dynamics of capital markets around the world. In this chapter, we will attempt to give you an overview of the landscape.

We will begin this examination by breaking down some key themes around regulations that apply to Robo-advisors universally. From there, we will take a look at some key regulatory guidelines that have been set...