After arguing that the Department of Labor's proposed fiduciary standard would deprive millions of Americans of financial advice, some industry opponents are pushing a more incendiary objection: that robo advisors may be unregistered investment companies, in violation of both the Investment Company Act of 1940 and SEC regulation.

The Labor Department, according to a report titled Robo-Advisors: A Closer Look,"has touted robo advisors as investment alternatives for retirement investors based on ill-founded assumptions that robo advisors are free or 'low-cost' and seek to minimize conflicts of interest."

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