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Even Robo-Advisors do not always look out for their clients' best interest!

The computer driven advisory firm known as Betterment was recently fined nearly $1/2 million for violating customer protection rules. According to the financial industy's self-regulator, Betterment benefited by using customers' free cash balances to fund a trading withdrawal program instead of providing the cash themselves. Betterment was instead able to avoid this additional interest expense and pocket the difference.

FINRA is the financial industry's self-regulating body and has a reputation for only fining members when their acts are fairly egregious. We can only hope this small penalty sets these actors straight.


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