ASIC acknowledges gaps in robo-advice compliance
The Australian Securities and Investments Commission (ASIC) has confirmed its support for robo-advice even though it acknowledges substantial regulatory issues are yet to be resolved.
ASIC chairman, Greg Medcraft has told a FINSIA forum in Sydney today that the regulator sees robo-advice as having the potential to offer a convenient, low-cost advice service to consumers, and to also deliver benefits such as improved compliance and record keeping.
Medcraft also claimed that robo-advice had the potential to reduce conflicts of interest.
However, he acknowledged that the provision of robo-advice raised interesting regulatory issues and challenges including how robo-advice providers could comply with best interests duty and the training and competency of those sitting behind the robo-advice model.
Medcraft also acknowledged that unanswered questions remained about whether robo-advice providers could adequately compensate consumers for poor advice.
He said ASIC had set up an internal Robo-advice Taskforce to look at robo-advice issues, and was discussing the issues with robo-advice providers and those looking to join the space.
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
