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ASIC backs compliant robo-advice tools
ASIC backs compliant robo-advice tools
The Australian Securities and Investments Commission (ASIC) has supported the emergence of robo-advice, but has indicated that the tools must meet best-interest requirements.
ASIC executives answered questions about the emergence of robo-advice, including how it fits into the legal landscape, before Senate Estimates in Canberra yesterday.
ASIC commissioner John Price said there is an opportunity for robo-advice tools to provide financial advice, both tailored and general, to a larger group of individuals to the "benefit of all".
However, Mr Price said uncertainty remains around how important legal obligations apply to robo-tools.
"For example, the Future of Financial Advice [FOFA] reforms introduced an obligation for personal advice to make sure advice was in the best interest of the client," he said.
"So how does that translate into a digital environment?"
ASIC deputy chair Peter Kell reiterated that robo-advice needs to meet best-interest requirements.
"We want to make sure that some of the potential new entrants understand that. It's not suddenly the case that new rules apply because you happen to be robo," he said.
"On the other hand there seem to be some very good opportunities for some existing players to incorporate robo-advice into their models and potentially reach a wider audience."
Mr Price added that ASIC's robo-advice taskforce is investigating areas of uncertainty and areas where further guidance is needed. He said the commission is set to release a consultation document with draft guidance in the "not too distant future".
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