The corporate authorised representatives of Lime FS – Plenty Wealth and Lime Wealth – are digital advice providers authorised to provide personal financial advice to consumers, ASIC said in a statement.
After reviewing a sample of advice files from Plenty Wealth and Lime Wealth, ASIC raised concerns with Lime FS about the quality of advice being generated by the online tools and Lime FS’ ability to monitor the advice.
ASIC was concerned that the level of enquires made by the online tools about client objectives, financial situation and needs, were inadequate. In some instances, the recommendations generated by the tools were in conflict with client goals or with other recommendations also generated by the tools.
Plenty Wealth provided advice via an online tool about budgeting analysis, life insurance reviews, tax, investment and superannuation recommendations.
Lime Wealth provided advice via an online tool about the establishment of self-managed super funds (SMSFs), purchasing property with superannuation, commencing and ceasing pensions, and contributions into superannuation.
Lime FS decided to close down both online tools for the foreseeable future as a result of ASIC’s concerns.
“Digital advice tools offer a convenient and low-cost alternative to consumers who may otherwise not seek personal financial advice. However, the advice provided through these tools must meet the same legal obligations required of human advisers – the advice must be appropriate to the client and comply with the best interests duty,” said ASIC commissioner Danielle Press.
“ASIC expects AFS licensees and financial advisers using or recommending digital advice tools to ensure that they adequately monitor and test the advice for quality and appropriateness.”
[quote=Martin White]RESEARCHER – Don’t y’all know that the union/industry funds are ALL EXEMPT from ASICs scrutiny, red tape, FOFA and royal commission findings![/quote][quote=Martin White]RESEARCHER – Don’t y’all know that the union/industry funds are ALL EXEMPT from ASICs scrutiny, red tape, FOFA and royal commission findings![/quote]
Are you serious? You are clearly an uneducated fool! The union/industry funds have, and are expected to comply with the same laws as everyone else and have received the same ASIC notices and attention as everyone else. The regulator just hasn’t found the same rip off advice that the retail sector has so it doesn’t make the headlines. I am so sick of ill informed idiots thinking industry funds are the bad guys because they don’t understand it.
[quote=Anon][quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote][quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote]
Warren if you read the article carefully you will see that ASIC has not found the tool to be in breach of the Best Interest Duty (or any other law for that matter). All ASIC has done is expressed some concerns and then made a sweeping statement that financial advisers must comply with the Best Interest Duty. You can contrast this with other situations where ASIC explicitly states that advisers have breached the Best Interest Duty. You can also contrast it with Report 575 which stated that 91% of SOAs reviewed by ASIC were found to breach the Best Interest Duty. Sorry to say, it looks like ASIC have done a good job of muddying the waters and you have fallen for it hook line and sinker.[/quote][quote=Anon][quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote][quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote]
Warren if you read the article carefully you will see that ASIC has not found the tool to be in breach of the Best Interest Duty (or any other law for that matter). All ASIC has done is expressed some concerns and then made a sweeping statement that financial advisers must comply with the Best Interest Duty. You can contrast this with other situations where ASIC explicitly states that advisers have breached the Best Interest Duty. You can also contrast it with Report 575 which stated that 91% of SOAs reviewed by ASIC were found to breach the Best Interest Duty. Sorry to say, it looks like ASIC have done a good job of muddying the waters and you have fallen for it hook line and sinker.[/quote]
I have read the official ASIC announcement carefully and I know how their investigations work.
ASIC have intervened to stop this tool from continuing. Their investigations are ongoing and they are publicly advertising for “clients” of this tool to come forward. The next step is a best interest duty breach.
Lime / Plenty tried to fill a gap in the market, and commenced a long time before FASEA / RC etc.
They gave it a try, but ASIC and the changing regulatory environment as a whole did not enable it to be further developed and improved – its difficult enough for well resourced human advisers, let alone the robo element.
[quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote][quote=Warren ]There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?[/quote]
Warren if you read the article carefully you will see that ASIC has not found the tool to be in breach of the Best Interest Duty (or any other law for that matter). All ASIC has done is expressed some concerns and then made a sweeping statement that financial advisers must comply with the Best Interest Duty. You can contrast this with other situations where ASIC explicitly states that advisers have breached the Best Interest Duty. You can also contrast it with Report 575 which stated that 91% of SOAs reviewed by ASIC were found to breach the Best Interest Duty. Sorry to say, it looks like ASIC have done a good job of muddying the waters and you have fallen for it hook line and sinker.
How can any robo-advice tool established informed consent that complies with the Code of Ethics now administered by FASEA. This problem is irrespective of any argument over advice quality and appropriateness. More thought is needed, but the impact of Ageing Clients in professional responsibility will be unpacked at the Symposium being held by the College of Law in Sydney on 23rd October. Financial planners and advisers are welcome to take part oin this important conversation.
There must be a natural person behind any Robo tool that is responsible for that advice. Who is that person here and have they been banned? Will they (also) be subject to a $1m fine for breaching the best interest duty?
For those supporting the tools used I would suggest that if you had seen them you wouldn’t be doing so. I personally reported Plenty Wealth in relation to what they provided me with after making up a client situation because it was just wrong and they were trying to provide personal advice in an illegal manner for monetary gains.
Putting the whole robo adviser issue aside, I can only think that the poor guys at Lime are now at sphincter factor 10 about Asic’s next move. After all, the same Asic clowns appeared to have shut down Dover for using the word “protection” instead of “information”, even after it appeared they implemented the fix requested by Asic. Yeah, I hear you, Lime’s Robo’s might have got it wrong, but that appears to be what Asic has been promoting as an adviser replacement these days. So do we smash them for trying?
Hopefully they are given an opportunity to fix it all before being struck off the register, banned and given a lifetime publicly accessible black mark. Surely, if any potential harm to clients is resolved, with their issues rectified(maybe through some face to face advice now), the entire process has then worked without the need for public humiliation and the destruction of any future possible career.
I must concede, on the banning front, that most of those I have seen banned (at least those making the headlines) appear to have deserved it. Surely there is a better way to report/record it though. Publicly displaying the register for current advisers makes sense and I think this works for consumers, but surely any bannings/Undertakings/issues can be on an alternate private ASIC register, with the information to be released upon any application by any licensee. I find the idea of a Negative lifetime public profile as draconian, particularly where the causes for it occurring are subjective and open to interpretation by those responsible for it’s maintenance. I could not imagine what my life would be like if I was to get something wrong and then find myself in that position. I imagine that even going for a job at bunnings would be difficult.
[quote=Researcher]Soon ASIC will have shut down everyone and no one will be providing advice, well other than their union fund buddies. If ASIC is worried about the level of inquiry performed wait until they look at union funds. [/quote]
Have you seen examples of this bad advice/poor inquiry, or are you basing your dislike of them purely on your own situation and thinking the grass is greener on the other side of the fence.
[quote=Concerned adviser]When will ASIC look at Midwinter?
Can you expand on what Midwinter do wrong? As a MW user it is nothing more than a big database that spits out whatever the user asks it to.
RESEARCHER – Don’t y’all know that the union/industry funds are ALL EXEMPT from ASICs scrutiny, red tape, FOFA and royal commission findings!
I bet those robo advice tools made more sense than the confusing SoAs. RG90 is a fallacy.
When will ASIC look at Midwinter? I echo the sentiments above about their “robo tools”…
Seems like they are focusing on the small fish as usual
Robo tools have no ethics!
When do the Rabo tools have to sit the FASEA exam? Given they are issuing the advice it would make sense they would have to do this under the same exam conditions that an advisor has to complete them.
Soon ASIC will have shut down everyone and no one will be providing advice, well other than their union fund buddies. If ASIC is worried about the level of inquiry performed wait until they look at union funds.