Regulatory leadership in struggling – the US path in robo-advisors governance

ABSTRACT

As the paradise of robo-advisors, the US has the most advanced robo-advisors, but regulators and robo-advisory institutions still face issues. From the cases of Wealthfront, Betterment and Charles Schwab, various problems occur in regulating robo-advisors, especially from a fiduciary perspective. The US establishes a framework with the Investment Advisers Act, FINRA Rules and ERISA combined with specific state rules, which is comprehensive and economically efficient in general, and, in the meantime, the issues of regulatory uncertainty, technological imbalance, as well as fragmented organisational models still exist. The US adopts a multilayer and polycentric financial regulatory approach, and supervises robo-advisors via case law and administrative acts, which helps develop this concrete financial supervision system and leaves some problems. Looking forward, US regulators need to establish a unified licensed regime, make clear fiduciary compliance and liabilities mechanisms and strengthen the cooperation of self-regulation, federal and state initiatives.

KEYWORDS:

• Robo-advisors
• financial supervision
• fintech
• artificial intelligence

Disclosure statement

No potential conflict of interest was reported by the author(s).

Funding

This research was supported by PRC Supreme Court Major Judicial Research Project, ‘Research on Algorithm Technology Regulation’ (ZGFYZDKT202211-02).

Notes

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