Automated Investment Advice: Legal Challenges and Regulatory Questions

Abstract

This paper examines the basics of the automated investment advice (Robo-Advisory), attempts a definition and a taxonomy, and lays the necessary groundwork for analysing this phenomenon. The aim is to offer a broad framework to allow a better understanding of the current legal situation of Robo-Advisory. For this purpose, it delves into some key aspects that lawmakers should consider in order to create and implement efficient regulation of this emerging digital technology. In this sense, the goal is to clarify some aspects to understand Robo-Advisory from the legal point of view, considering the de-terminant uses of this kind of software to the financial and investment services, with a brief and focus on the current European Financial Market Regulation.

This paper examines the basics of the automated investment advice (Robo-Advisory), attempts a definition and a taxonomy, and lays the necessary groundwork for analysing this phenomenon. The aim is to offer a broad framework to allow a better understanding of the current legal situation of Robo-Advisory. For this purpose, it delves into some key aspects that lawmakers should consider in order to create and implement efficient regulation of this emerging digital technology. In this sense, the goal is to clarify some aspects to understand Robo-Advisory from the legal point of view, considering the de-terminant uses of this kind of software to the financial and investment services, with a brief and focus on the current European Financial Market Regulation.