FINRA Podcast: What You Should Know about Automated Investment Tools

FINRA released a podcast outlining the risks and benefits of automated investment tools.

The podcast discussed five considerations that investors should bear in mind before using any automated investment tool:

• Review all disclosures, including any terms and conditions related to fees and expenses for using the tool or costs related to selling or purchasing investments.
• Consider the tool's key assumptions, and be aware that an automated tool may rely on assumptions that could be incorrect or prove inapplicable to your situation.
• Be aware that an automated investment tool's output depends directly on the information provided to it by the user.
• Understand that an automated investment tool's output may not reflect or assist your financial needs or goals.
• Safeguard your personal information, and guard against automated investment tool sponsors who might collect your personal information for purposes that are unrelated to the tool.

See: Transcript of FINRA Podcast; Listen to FINRA Podcast.Related news: SEC and FINRA Issue Investor Alert Regarding Automated Investment Tools (May 11, 2015).