The corporate regulator has set out its minimum expectations for robo-advisers in providing advice that is in the best interests of their clients.
In its Regulatory Guide 255 (RG 255), Providing digital financial product advice, released yesterday, ASIC said that robo-advisers should think very carefully about the way they communicate with clients.
“We suggest that you consider how information is likely to be interpreted by clients on the different electronic devices they may use to access the advice,” the guide said.
“You should monitor digital communications on an ongoing basis so that information is presented in a way that facilitates client engagement and understanding.”
ASIC also suggested that robo-advisers have a robust ‘triage’ or filtering process in place “to filter out clients for whom the digital advice is not appropriate”.
“Scaled advice provided under a digital advice arrangement may not be appropriate for everyone,” the guide said.
“We are more likely to scrutinise a digital advice model that results in all clients receiving financial product advice.”
ASIC established a taskforce last year dedicated to examining issues within the robo-advice sector.
ASIC deputy chairman Peter Kell said that the regulator is committed to encouraging innovation that may benefit consumers.
“Our guidance on regulating digital advice is a useful starting point for those providing or intending to provide digital advice in Australia,” he said.
“ASIC supports the development of a healthy and robust digital advice market in Australia as a convenient, low-cost option for retail clients, and our guidance will help ensure that consumers can have confidence when they deal with digital advice providers.”
Adrian Flores is a deputy editor at Momentum Media, focusing mainly on banking, wealth management and financial services. He has also written for Public Accountant, Accountants Daily and The CEO Magazine.
You can contact him on [email protected].
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