As volatility during Brexit showed Robo advisors can halt access to trading your investments, but calling them could be a way to overcome the obstacle.
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Betterment LLC, which halted trading for about 2.5 hours during the market selloff June 24 in the aftermath of the U.K.'s June 23 vote to exit the European Union, says this power allows it to shield clients from poor trade execution and higher transaction costs. The eight-year-old firm also notes that its rights to suspend trading are spelled out in its client agreement.
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Independent robo advisory Wealthfront Inc., which manages $3.5 billion, reserves "the right to suspend trading if it is not in the client's best interest," a spokeswoman said. To date, she said, the Redwood City, Calif., company has never taken such a step, including during the Brexit meltdown.
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