Not all firms that sell investment portfolios online can be called as robo advisers.
A robo advice firm provides personal financial advice or personal investment advice. They may also manage your wealth through a managed discretionary account structure or separately managed account structure or individually managed account structure, or through a managed account.
Firms that do not provide personal financial advice online cannot be called as robo-advisers, even if they sell investment portfolios or funds online.
The activity of providing personal financial advice is highly regulated by the regulatory authorities, and a firm that provides personal financial advice should get the necessary licences. So, in effect, every B2C robo-advice firm should have the necessary licences to provide personal financial advice. If a firm that serves retail clients does not have necessary licences, then it should not be called as a robo-advice firm.
For example, our firm QuietGrowth provides personal financial advice to retail clients through online web interfaces and mobile apps. So, our firm can be termed as a robo-advice firm. We also manage the wealth of our clients through the managed discretionary account structure.
- Should a firm that does not offer ‘personal financial advice’ be called a robo advisor?
- Does a robo adviser give personal financial advice?
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