The Securities and Exchange Commission this week published information and guidance for investors and the financial services industry on the fast-growing use of robo-advisers.

Because of the unique issues raised by robo-advisers—registered investment advisers that use computer algorithms to provide investment advisory services online with often limited human interaction—the SEC’s Division of Investment Management issued guidance for investment advisers with suggestions on meeting disclosure, suitability, and compliance obligations under the Investment Advisers Act.

A second publication, an Investor Bulletin issued by the SEC’s Office of Investor Education and Advocacy, provides individual investors with information they may need to make informed decisions if they consider using robo-advisers.

The Investor Bulletin describes a number of issues investors should consider, including:

The level of human interaction important to the investor;

The information the robo-adviser uses in formulating recommendations;

The robo-adviser’s approach to investing; and

The fees and charges involved.

“As technology continues to improve and make profound changes to the financial services industry, it’s important for regulators to assess its impact on U.S. markets and give thoughtful guidance to market participants,” SEC Acting Chairman Michael Piwowar said in a statement. “This information is designed to help investors tap into the opportunities that FinTech innovation can provide while ensuring fairness and investor protection.”

Investors can use the SEC’s Investment Adviser Public Disclosure (IAPD) database, which is available on Investor.gov, to research the background, including registration or license status and disciplinary history, of any individual or firm recommending an investment, including robo-advisers, which are typically registered as investment advisers with either the SEC or one or more state securities authorities.

Robo-advisers, as registered investment advisers, are subject to the substantive and fiduciary obligations of the Advisers Act. The Guidance Update notes that there may be a variety of means for a robo-adviser to meet its obligations to clients under the Advisers Act, and that not all of the issues addressed in the Guidance Update will be applicable to every robo-adviser.

Rochelle Kauffman Plesset, and Robert Shapiro from the Division of Investment Management contributed substantially to preparing the Guidance Update, with significant assistance from the Division of Investment Management’s Risk and Examinations Office and the Office of Compliance Inspections and Examinations. Owen Donley, Jill Felker, and Holly Pal from the Office of Investor Education and Advocacy contributed substantially to preparing the Investor Bulletin.

Both publications follow the Commission’s Fintech Forum, held Nov. 14, 2016, which included a panel discussion on robo-advisers.

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