The scrutiny is aimed mainly at "fully automated" platforms.

Robo-advisors registering in Massachusetts will now face scrutiny from the state’s securities division on whether they can fulfill their fiduciary duties, William Galvin, the state’s securities regulator, said Friday.

The Massachusetts Securities Division issued Friday a policy statement that will serve as guidance to robo-advisors seeking to register in the state, saying robos  would be evaluted “on a case-by-case basis.”

Galvin said in releasing the policy statement that “entities that create computer-generated portfolios but fail to do the necessary customer due diligence to know their customers and who specifically decline most if not all the fiduciary duty are not performing the duties of investment advisors.”

Robo-advisors “may meet the needs of certain customers, but this alone does not make them investment advisors,” Galvin said, adding that the fiduciary standards that apply to investment advisors “will apply in equal measure to robo-advisors, and they cannot disclaim those away.”

While the term “robo-advisor” has been used to describe advisors who supplement their services with asset allocation algorithms, Massachusetts’ policy statement applies primarily to “fully automated” robo-advisors “devoid of all human services.”

The policy states that fully automated robo-advisors generally:

1) do not meet with or conduct significant (or any) due diligence on a client;

2) provide investment advice that is minimally personalized;

3) may fail to meet the high standard of care that is imposed on the appropriateness of investment advisors’ investment decision-making; and

4) specifically decline the obligation to act in a client’s best interests.

Galvin noted the concerns also raised by the Securities and Exchange Commission as well as the Financial Industry Regulatory Authority about robo-advisors’ ability to act as fiduciaries.

— Check out FINRA Warns BDs to Follow Robo-Advice Rules on ThinkAdvisor.