ASIC refuses digital advice licensing relief
The Australian Securities and Investments Commission (ASIC) has refused to grant relief to an entity from the requirement to hold an Australian financial services licence (AFSL) for the development and use of a robo-advice tool, as it considered that to constitute personal advice.
In its document titled ‘Overview of decisions on relief applications (April to September 2016)', ASIC said the entity lodged an application to develop and use a digital advice tool for use by superannuation fund trustees on their websites to provide members with automated personal advice through a retirement income calculator.
"We considered that the calculator constituted providing financial product advice that was personal advice," ASIC said.
ASIC referred back to an earlier document, Regulator Guide 167, ‘Licensing: Discretionary Powers (RG 167), which explained the criteria it considered when deciding to grant relief from licensing provisions. This included granting relief to tackle "atypical or unforeseen circumstances or unintended consequences of the licensing provisions of the Corporations Act".
ASIC said it felt the applicant had failed to demonstrate that compliance with the Corporations Act would result in unforeseen circumstances or unintended consequences of the licensing provisions of the Corporations Act 2001.
ASIC considered that the application was not within its policy, including Regulatory Guide 51, ‘Applications for Relief', and RG 167, because it felt the regulatory detriment was not negligible nor was it outweighed by commercial benefit.
ASIC also felt the licensing provisions would have imposed other obligations on the AFS licensee, including acting in the client's best interests and comply with other related obligations when providing personal advice, manage conflicts of interests, and ensure the financial services provided by the licence are done so honestly, and fairly.
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