Industry leaders outline best practices for digital advice platforms at compliance seminar.

By Stephen P. Wink and Naim Culhaci

Robo-advisers, or digital advice platforms, have rapidly become a standard part of financial services offerings. Virtually every incumbent retail brokerage firm either has established or is planning to establish a digital advice platform, joining the pure FinTech players who pioneered this market. This turn toward robo-advisers is being driven by the potential for cost efficiencies, as well as the desire to connect with younger investors, who often prefer an online interface.

Over the past few years, regulators, lawyers, and compliance professionals have grappled with how to apply established regulatory concepts to the robo-advisory context, in which human involvement can be minimal to nonexistent. At the 2019 SIFMA Compliance & Legal Society Seminar, Latham & Watkins participated in a panel discussion with legal executives from banks and investment firms on this issue.