Betterment Faces Class Action Lawsuit Over Cash Sweep Accounts
Action Required: Review cash sweep disclosures and yield arrangements for any automated platforms or third-party custodians currently recommended to clients.
Betterment is facing a class-action lawsuit alleging that the robo-advisor profited from cash sweep accounts that failed to generate interest for clients. This case highlights potential fiduciary risks associated with automated cash management strategies, a critical consideration for advisors utilizing or recommending robo-advisory platforms.
Read full article at WealthManagement.comWant the full daily Briefing?
30 stories like this every day, with Action Required call-outs and direct lines to ask Aria — finsay's AI compliance assistant.
Try free for 14 daysRelated stories
- Trump Accounts auto-opened Oct. 1 but have your clients claimed theirs?
New 'Trump Accounts' (likely referring to specific 529 or similar savings vehicles) were auto-opened on October 1, but many remain unclaimed…
- SEC Crypto Custody Proposal Draws Divisive Reactions
The SEC has proposed new rules that could allow financial advisors to self-custody crypto assets under specific conditions, aiming to reduce…
- SEC Proposal Would Address How Investment Advisers and Funds Can Custody Crypto Assets Under the Federal Securities Laws
The SEC has proposed new rules to establish a formal framework for how registered investment advisers and funds must custody crypto assets. …