Regulating digital financial product advice

Regulating digital financial product advice

The Australian Securities & Investment Commission (ASIC) issued a proposed Regulatory Guide – Providing Digital Financial Product Advice to Retail Clients (Guide) for consultation to the market, requesting feedback from industry and interested parties on how to regulate robo-advice.

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The Guide is a very welcome tool, offering useful guidance on how to provide digital advice within the framework of existing legislation for both traditional financial advisers and new entrants such as fintech startups.

In our submission to ASIC, KPMG set out what we believe would help the Guide to find the right balance on regulating robo-advice at its current stage of development:

  • Clarify the definition of digital advice and specify the various business models that are permitted within the current regulatory framework.
  • Confirm the guide focuses on those robo-advisors providing advice directly to clients.
  • Explain the obligations of third-party technology providers, who we believe are distinct from those of financial advisors working directly with clients.
  • Include a list of all the regulatory guides that a new entrant to the industry should consider.

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