The SEC is focusing on determining how robo advisers such as Betterment and BlackRock’s Future Advisor provide customers with enough information to understand how the service works.
Betterment, one of the largest robo advisers, updated its investor brochures after clients complained that it suspended their trading in the aftermath of the U.K.’s July vote to exit the European Union. The firm’s customer agreement says it can limit or make access unavailable during periods of “market volatility, peak demand, systems upgrades, (and) maintenance.” The form it updated is a separate, regulatory brochure that advisers are required to share with investors under SEC rules.