Lawyer rejects robo-advice regulatory concerns

In its post-FSI submission to Treasury, the FPA said ASIC’s “technology-neutral” approach to regulation may no longer be appropriate and said the government should be on the lookout for potential risks and conflicts of interest.

However, in a statement to ifa, Ms Wivell Plater said the regulatory regime for robo-advice products is already well-established.

“Robo-advice is already subject to all the same regulatory requirements as adviser-delivered advice,” she explained.

“It shouldn't need different or additional regulation regarding the application of the best interests duty or managing conflicts of interest because it provides essentially the same services as advice delivered by human beings and the potential for conflicts of interest is no different.

“There is already a great deal of ASIC guidance on these requirements which, in my experience in dealing with robo-advice businesses, is quite sufficient.”

Automated tools can also be programmed to manage conflicts of interest and adhere to compliance requirements, unlike human advisers, Ms Wivell Plater added.

But while arguing that the current regulatory regime is adequate, she did say that provisions allowing for more “innovative forms of dislclosure and electronic dealing” is required in the wake of the emergence of robo-advice tools.