Do Robots Rule Wealth Management ? A Brief Legal Analysis of Robo-Advisors
In the latest SZW/RSDA paper, Volume 1 Issue 2022, dedicated to digitalisation and innovation, Célian Hirsch and Nastassia Merlino focus on the legal duties of robo-advisors in Switzerland. They analyse various legal frameworks, from Swiss financial market law, to contract law, and data protection law, whilst comparing these frameworks with European law.
As financial service providers, robo-advisors face regulatory and contractual duties such as establishing a client profile and investment strategy, assessing suitability, and respecting the duty to inform. As robo-advisors can be considered to provide automated individual decision-making in certain cases, they could be faced with data protection duties, such as the duty to implement safeguards or the right to general information and the logic involved in the automated decision making. However, robo-advisors have no obligation to disclose the functioning of their algorithms.