ASIC has released a draft regulatory guide and consultation paper on robo-advice, outlining issues unique to the industry and emphasising AFSLs' responsibility to monitor their algorithms.
In a statement, the corporate regulator said it is seeking feedback on the proposals made in the paper, which include applying organisational competence obligations to robo-advisers and requiring AFSLs to monitor and test the algorithms underpinning digital advice.
The proposals address issues that those who provide digital advice to retail clients need to consider – from licensing through to the provision of advice.
ASIC commissioner John Price said: "ASIC is committed to helping industry take advantage of the opportunities offered by robo-advice, while ensuring that investor and financial consumer trust and confidence are not compromised."
Mr Price added: "We see digital advice as having the potential to offer Australian consumers access to good quality, low-cost financial advice. We encourage industry and other stakeholders to take part in this consultation process."
ASIC indicated that the draft guidance was prompted by engagement with digital advice providers about their business models.
"It became clear that digital advice providers would benefit from additional ASIC guidance specific to digital advice," the statement said.
In the statement, ASIC also made its definition of robo-advice clear: "Digital advice (also known as 'robo-advice' or 'automated advice') is the provision of automated financial product advice using algorithms and technology and without the direct involvement of a human adviser."
The deadline for submissions is 16 May, with the final guide to be released in August.