Bill Gavin Commonwealth Secretary of Massachusetts Commonwealth

Robo-advisers in the Commonwealth cannot fully satisfy their fiduciary obligations if they fail to perform the initial and ongoing due diligence necessary to act in the best interests of their clients. Specifically, robo-advisers' failure to conduct due diligence, as well as robo-advisers' depersonalized structure, may render them unable to provide adequately personalized investment advice and make appropriate investment decisions ...

Robo-advisers attempt to avoid the issues raised by the structure of their automated investment services, discussed above, by specifically disclaiming various duties in customer agreements and elsewhere. These disclaimers are typically embedded in a lenghty electronic client agreement that must be "signed" by the client before services can be provided. But robo-advisers cannot act as fiduciaries as required under the law in the Commonwealth while, at the same time, disavowing their central fiduciary obligations.