AI-Driven Investing and Use of Robo-Advisers by Retirement Plans

BARBRI

This CLE course will discuss regulatory compliance issues for AI-driven investments and the use of robo-advisers that provide investment advice and discretionary management services to ERISA retirement plans and IRAs. The discussion will include ERISA's fiduciary and prohibited transaction provisions, the Code's prohibited transaction provisions, and SEC guidance for AI-driven investing and the use of robo-advisers under the Investment Advisers Act. The panel will also provide guidance to counsel for plan sponsors on the legal risks and evaluating and monitoring AI-driven investing and the use of robo-adviser services.

Description

Unlike traditional investments, AI-driven investing typically involves varying levels of, or even no, human interaction with clients. While AI-driven investing provides retail investors with affordable investments, guidance, and other services, they present unique regulatory challenges.

The use of AI-driven investment services to ERISA-covered retirement plans, via robo-advisers or otherwise, must comply with ERISA's fiduciary duty and prohibited transaction provisions, and the prohibited transaction provisions under the Internal Revenue Code. Robo-advisers providing services to IRAs must comply with the Code's prohibited transaction provisions.

Counsel to AI-driven investment advisers must ensure strict compliance with required disclosures in their online platforms, offering materials, and client questionnaires. Counsel to retirement plan sponsors must be prepared to evaluate these services, contracts, and disclosures.

Listen as our panel guides you through the regulatory compliance scheme for AI-driven investments and robo-advisers under ERISA, the Code, the Advisers Act, and the regulatory requirements of the DOL, the IRS, and the SEC. The panel will discuss applicable ERISA fiduciary and prohibited transaction provisions and SEC guidance for those advisers registered under the Investment Advisers Act.

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