Analyze automated investment platform terms for fiduciary duty disclaimers, algorithm liability gaps, and tax-loss harvesting risks.
Built by Sergei Tokmakov, California-licensed attorney.
Automated investing platforms have unique liability gaps around algorithms and advice. These provisions have caught investors off guard during market downturns.
Many robo-advisors disclaim fiduciary duty despite marketing "personalized advice." Without fiduciary status, they're not legally required to act in your best interest.
Robo-advisors disclaim liability for algorithm errors, software glitches, and incorrect trades—even if the error causes significant losses.
Automated tax-loss harvesting can trigger wash sales if you hold similar investments elsewhere, potentially causing tax liability instead of savings.
Automatic rebalancing during market volatility can lock in losses. Platforms disclaim responsibility for rebalancing timing decisions.
Some robo-advisors keep significant cash positions earning minimal interest while charging full advisory fees on total assets including cash.
Many robo-advisors vote proxies on your behalf without your input, potentially voting against your values on ESG and corporate governance issues.
Common terms in robo-advisor agreements affecting your investment rights.
Investment disputes through FINRA or private arbitration.
Cannot join group lawsuits over investment losses.
Advisory fees, expense ratios, and hidden costs.
Past performance not indicative of future results.
Investment strategies can change without notice.
Securities investor protection limits and exclusions.
Consent to electronic trade execution.
SEC/FINRA registration and oversight.
Paste terms of service below to identify potentially problematic clauses.
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