ASIC’s Greg Medcraft says ‘robo advice’ can reduce fees and conflicts
Australian Securities and Investments Commission chairman Greg Medcraft says computer-generated financial advice, or “robo advice” could slash investment costs and eliminate conflicts of interest in the maligned financial planning industry.
ASIC has established a “robo-advice taskforce”, which is investigating the suitability of potential entrants, who use computer algorithms to match investors with suitable assets at a lower cost than human advisers.
ASIC wants to know how they intend to comply with best interest duties, how algorithms are developed and tested, and how the people running the start-ups are trained and compensated.
In a speech to a Finsia lunch in Sydney on Thursday, Mr Medcraft said ASIC believed digital financial advice was going to grow rapidly, which required the regulator to put strategies in place to ensure it understood the risks so customers could have trust in the market.