A robo-advice provider has shut down two digital advice tools following concerns raised by the Australian Securities and Investments Commission (ASIC).
The regulator said that Sydney-based firm, Lime FS Pty Ltd had voluntary shut down the advice tools.
Lime FS corporate authorised representatives, Plenty Wealth Pty Ltd and Lime Wealth, are digital advice providers authorised to provide personal financial advice to consumers.
ASIC said Plenty Wealth provided advice via an online tool about budgeting analysis, life insurance reviews, tax, investment and superannuation recommendations.
Lime Wealth provided advice via an online tool about the establishment of self-managed super funds (SMSFs), purchasing property with superannuation, commencing and ceasing pensions, and contributions into superannuation.
“After reviewing a sample of advice files from Plenty Wealth and Lime Wealth, ASIC raised concerns with Lime FS about the quality of advice being generated by the online tools and Lime FS’ ability to monitor the advice,” the regulator said.
“ASIC was concerned that the level of inquires made by the online tools about client objectives, financial situation and needs, were inadequate. In some instances, the recommendations generated by the tools were in conflict with client goals or with other recommendations also generated by the tools.”
It said Lime FS decided to close down both online tools for the foreseeable future as a result of ASIC’s concerns.
Plenty Plus and Plenty Wealth later issued a statement in which they said that despite dialogue with ASIC, they had formed the view that it was overly challenging to provide holistic digital advice within the constraints of the existing regulatory framework.
"Unfortunately, the further steps we would need to take (over and above the extensive steps we have already taken both proactively and responsively) would not be commercially viable for us at this point in time. Given the above, that the Plenty Wealth and Plenty Plus businesses will cease providing advice," the statement said.