In our last post, Craig laid out the process of advertising a performance track record. That’s great, if you have a track record. What about a newly operational robo-adviser with no performance history? Your firm likely has spent considerable resources building and developing an investment strategy and corresponding algorithm. But without a client base,
Don’t Oversell It – False or Misleading Advertising
You’re ready to advertise. You know the basics, you can handle the complexities of including past specific recommendations, and even understand how to appropriately include client testimonials. Let the advertising campaign commence! Well, not so fast. Even if you’ve successfully managed all of the potential pitfalls we’ve discussed so far, you must
Bringing Up the Past – How to Navigate Past Specific Recommendations
You want to attract clients. You need to advertise to attract clients. You might think that a great way to attract new clients is to advertise how past recommendations or security selections have worked for current clients. You may want to explain on your website or app how your model works by giving examples of
Compliance with Solicitation: How to Build a Strong Referral Base
The saying goes, referrals are the lifeblood of any business. Indeed, all business owners, robo-advisory firms included, strive to provide a level of value and service to their customers such that those customers in turn become advocates and solicitors of the business. Unfortunately, word of mouth referrals alone are not usually enough. Your firm may
Can We Do That: A Case for Early Compliance Intervention
So, you’ve decided to launch a robo-advisory firm? Understandably, your first considerations are likely tied to the functionality of your product. Perhaps the final testing of your algorithm is complete, and your attention has turned to how clients will use your product. What will your client interface look like? How will client information be collected?
Brochure Supplements – How Much do your Clients Know about the Individuals Behind your Algorithm?
No matter what form of investment advisory firm you have, completing Form ADV is a necessity. As a reminder, Form ADV is the form used by investment advisers to register with both the SEC and state securities regulators (see our June 12, 2019 post for more detail). Today’s post deals with the particularities
Providing Advice in a Digital World: Applying the Suitability Standard to Robo-Advisers
All investment advisers must provide advice suitable for a particular client based on the client’s financial situation and investment objectives. Traditional investment advisers usually do this after getting to know their clients through conversations and other forms of direct communication. Robo-advisers, by contrast, must accomplish this through other means. Given this universal duty, it’s important