Research On The Regulations Of China’s Robo-advisor

After the financial crisis in 2008,Robo-advisors emerged.It combines artificial intelligence with traditional investment advisors,replacing traditional natural person investment advisors with personalized services for investors.Before giving investment advice,Robo-advisor will provide investors with a risk assessment questionnaire,and analyze the risk tolerance of different investors based on the results of the questionnaire and recommends asset portfolios with corresponding risk levels to them.Compared with traditional investment consultants,this service model emphasizes the personalization of the investment portfolio and reduces the time cost of contact and the investment cost of investors.All kinds of advantages make the Robo-advisor develop rapidly in the world,and it is widely favored by investors.After 2014,Robo-advisors have gradually joined China’s securities market,bringing new opportunities and challenges.As a new thing,Robo-advisors have many incompatibilities with China’s existing regulatory rules,which hinder the long-term development of smart investment advisory and are not conducive to investor protection.For example,in terms of market access,China’s traditional investment consultants can only engage in investment advisory services and cannot manage client assets.This restriction makes it difficult for Robo-advisors to monitor accounts and adjust positions in real time,which is essentially not related to "recommended software",moreover,conducting relevant business in violation of current laws also exposes many companies to the risk of illegal operations.In addition,the lack of investor suitability obligations may cause investors to assume risks beyond their affordability and cause large-scale losses.Therefore,restrictions on asset management by investment consultants should be gradually lifted and the personnel and technical requirements that must be involved in Robo-advisor should be clearly defined.Furthermore,Robo-advisors should strengthen investor suitability review to ensure that investment advice meets investors’ risk tolerance.In addition,investor education cannot be ignored to make investors aware of the inherent risks of investment.Secondly,advanced investment technologies such as artificial intelligence are added to the Robo-advisor business.Therefore,the operators should be strictly required to abide by the corresponding fiduciary obligations and clarify the specific requirements of fiduciary obligations in the service process,reduce information asymmetry,formulate corresponding regulatory rules to prevent operators from damaging investors’ rights,and pursue the best interests for investors.But there is no specific regulation in China.In practice,it is very likely that investors will suffer losses due to violations of obligations by Robo-advisor operators;In the end,China has not clearly stipulated the main body and the constituent elements of civil liability for investors’ compensation for damages.In my opinion,robot does not have independent will and property and is not conducive to investor protection,so it is not suitable as the subject of civil compensation liability,so the operator should be responsible,and the breach of fiduciary duties is one of the constituent elements of civil liability.The operator who pays in advance can recover from other actual responsible persons,and for losses not caused by breach of fiduciary duty,the operator is required to purchase professional insurance,and the insurance company shall compensate.To remove barriers to the development of Robo-advisor in China while ensuring investor safety,we must learn from foreign experience,explore new regulatory approaches,and formulate special regulatory rules based on China ’s actual situation.