Transformation of Investment Advice: Digital Investment Advisors as Fiduciaries

It is not surprising that the investing public seeks accessible, low-cost, and reliable advice. This chapter discusses how digital, or robo-advisors have triggered a dramatic upheaval in how investment advice is formulated, delivered, and applied on an ongoing basis to actively managed retail investment accounts. The availability of digital advice is promoting the important policy objective of expanding access to retirement advice to a growing segment of underserved and undersaved Americans. In addition to discussing the socio-economic and technological factors that accelerating the growth of digital investment advisors, the chapter also discusses how such advisors fit within the existing legal and regulatory framework governing retail investment activities. It concludes with a look ahead anticipating how digital advice will continue to disrupt the financial services industry