'Current regulatory approach is preventing innovation', company says

In its submission to the Quality of Advice review, HUB24 called for the creation of a regulatory environment that enables and supports the industry in seeking to innovate and invest in digital advice.

The platform provider argued that while AFS licensees are eager to pilot digital advice solutions to stay relevant and connected to a broader range of clients, they are being held back by regulatory uncertainty.

“Whilst the Corporations Act is technology neutral and ASIC supports the development of a robust digital advice market in Australia and has published Regulatory Guide 255: Providing digital financial product advice to retail clients, ASIC’s position is that it is not able to endorse any solution as being compliant with the law,” HUB24 wrote.

“Where an industry participant is unwilling to accept the risk that a solution may not be considered by ASIC to comply with the law, the only viable alternative available is to make an application for relief and/or explore potential eligibility for the government’s enhanced regulatory sandbox exemption,” it explained.

As such, HUB24 argued that ASIC’s approach is driving undue caution among advisers and is, in turn, stalling innovation.

“The only way to test digital advice solutions and obtain the opinion of ASIC is to provide advice and accept the risk,” the company said.

The platform provider underlined the importance of digital advice, emphasising its ability to increase accessibility and affordability.

Moreover, it was also noted that digital advice should not be differently regulated.

“The digital medium should be viewed as an enabler of advice,” HUB24 told the government.

In closing, the firm asked the government for a “clear signal” so that the industry can be confident to innovate and invest on the basis that advice is compliant.