A robo-advisor is an online financial advisor that provides automated investment advice with little human interaction. Does a robo-advisor serve clients as a fiduciary?
Many robo-advisors are registered investment advisors, which suggests they have a fiduciary duty to clients. As a registered investment advisor, a robo-advisor is required to act in their clients’ best interests.
However, a robo-advisor is unable to understand the entire situation of an investor. Therefore, a robo-advisor only offers advice on a limited scope.
From an investment standpoint, a robo-advisor can serve as a fiduciary with a limited scope. A robo-advisor cannot offer guidance that a human, a fiduciary financial planner, can provide from a planning standpoint.