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Schwab’s $200 Million Charge Suggests Additional Scrutiny for Online Brokerages

July 9, 2021


The potential action on one of the largest digital investment platforms sheds light on the increasing need for transparency among automated advice providers. As more retail investors flock toward online brokerages, whether self-directed broker-dealers or Robo-advisors, regulators are likely to cast a more critical eye on digital investing tools, experts say.

Foreside’s Douglas Kamin, Managing Director, recently shared with Investment News that The SEC released a robust set of guidance in February 2017 spelling out what Robo-advisors need to disclose, like fees the platform collects even if they are indirect. Yet, the environment has changed rapidly in recent years, and issuing new guidance for both Robo-advisors and online brokerages is a seminal piece.

Click here to learn more about why for Robinhood, the line between offering customer service versus financial advice is growing thicker and what employee training will be critical for service reps to understand what words are prohibited by the SEC.