Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Green light given for robo-advice

Green light given for robo-advice

24 October 2017

The Financial Markets Authority (FMA) has given the green light to fast-tracking regulation that will make so-called “robo-advice” legal in New Zealand.

Robo-advice, also known as automated advice or online financial advice, is effectively an automated, online financial adviser that helps people invest their money or make other financial decisions.

Under current regulations, personalised financial advice must be provided by an Authorised Financial Adviser who must be a “natural person,” effectively prohibiting the use of online financial platforms which give advice not clearly attributed to a person.

However, in looking at global trends, the FMA has recognised that such online financial advice platforms could improve the wider public’s access to personalised advice services, and could help to address an advice gap they have previously identified in New Zealand.

An FMA-led consultation process found strong support for robo-advice, giving it a mandate to grant exemptions and allow for fast-tracked robo-advice.

Companies wishing to provide such services must apply for an exemption and will be monitored by the FMA. They must also be able to meet competence, capability, and good character requirements.

Rachel Strevens, Founder & CEO of online financial and investment platform Ilumony, says that this is a huge step forward for New Zealand.

“We’ve been providing a basic level of online financial advice for the last six months, and the feedback from customers has been great. However, we’ve been significantly restricted in what we can do due to the regulation that exists in New Zealand, which has acted as a bit of a handbrake.

“This decision will allow us to go into a lot more detail with our customers, and provide them with much more valuable and beneficial personalised advice via our online platform.

“In some areas, New Zealand is rather advanced when it comes to financial market technology & innovation, however this is one area where we have been left lagging.”

Strevens, an Authorised Financial Advisor, says robo-advice platforms offer many benefits to everyday New Zealanders because their low operating cost model allows for a much wider audience to access financial advice.

Robo-advice platforms globally have proven popular with millennials and investors with smaller amounts of money to invest who would generally not have access to other financial advice channels.

In New Zealand, the FMA believes robo-advice could be of particular help to KiwiSaver investors who collectively have investment assets of more than $40b. Less than 0.3% of all new KiwiSaver accounts or transfers receive personalised financial advice.

New Zealand now has a little bit of catching up when it comes to online robo-advice platforms.

“There are many countries that have been allowing this kind of robo-advice for years, however our regulation has held us back, so it’s great to have this positive step forward from the FMA. We’ve been expecting and preparing for this decision so we’re perfectly positioned to make the most of these rule changes for our customers.”

Since launching earlier this year, Ilumony has helped advise Kiwis on more than $8.5 million in financial investments.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Department Of Conservation: Beech Mast On The Cards After Warm Summer

Climate modelling shows this year’s hot March has increased the chance of beech forest seeding next summer in parts of New Zealand, which could be bad news for native wildlife. The Department of Conservation (DOC) uses data from NIWA’s virtual climate ... More>>

Government: Delivering Lower Card Fees To Business

Commerce and Consumer Affairs Minister David Clark has today announced the Government’s next steps to reduce merchant service fees, that banks charge businesses when customers use a credit or debit card to pay, which is estimated to save New Zealand businesses ... More>>

SEEK NZ Employment Report: April 2021

OVERVIEW OF APRIL 2021: STATE OF THE NATION: April, for the second consecutive month, saw the highest number of jobs ever advertised on Applications per job ad fell 9% month-on-month (m/m). SEEK job ads were up by 12% m/m. SEEK job ads were ... More>>

Geo40: Global Plans To Recover Low-Carbon Lithium At Scale Accelerated By Investment Of Up To $7.5m By Pacific Channel

New Zealand’s leading sustainable, mineral-recovery company, Geo40 Limited has secured up to $7.5m in equity investment from New Zealand deep-tech specialist Venture Capital firm Pacific Channel to fast-track plans to develop its nascent lithium-from-geothermal-fluid ... More>>

Stats: Lower Job Security Linked To Lower Life Satisfaction

People who feel their employment is insecure are more likely than other employed people to rate their overall life satisfaction poorly, Stats NZ said today. New survey data from the March 2021 quarter shows that 26 percent of employed people who thought ... More>>

The Conversation: The Outlook For Coral Reefs Remains Grim Unless We Cut Emissions Fast — New Research

A study of 183 coral reefs worldwide quantified the impacts of ocean warming and acidification on reef growth rates. Even under the lowest emissions scenarios, the future of reefs is not bright. More>>