18 Oct 2017

'Robo' financial advice on the way

1:47 pm on 18 October 2017

The Financial Markets Authority has decided to allow financial services companies to provide so-called "robo-advice" to individuals.

Computer keyboard

Photo: 123RF

Such methods are widespread around the world, but New Zealand law requires any financial advice to be given by a human adviser, and law changes to allow advice to be given by a computer programmes are not expected to be passed until 2019.

Companies wanting to offer robo-advice will have to apply to the FMA for an exemption.

Authority director of regulation Liam Mason said safeguards would be put in place to ensure investors are protected.

"We're going to require that the advice meets the same standards as those that apply to authorised [human] financial advisers."

Mr Mason said companies offering such advice would also have to show that their directors and advisers were of good character, and their systems and controls were up to standard.

He said robo-advice would not suit all people, but there were people receiving little or no financial help at the moment and technology could help a wider audience access suitable investment information.

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