ASIC has released guidance on providing digital financial product advice to retail clients. Regulatory Guide 255 covers some of the issues that digital advice providers need to consider when operating in Australia, from the licensing stage through to the provision of the advice.

Digital advice is the provision of automated financial product advice using algorithms and technology, with no direct involvement from a human advisor, and can be general or personal advice. The provision of digital advice in Australia has grown rapidly since 2014 and ASIC expects the growth to continue. ASIC supports the development of the digital advice market, given that it can be a convenient and low-cost option for retail clients who may not otherwise seek advice.

The regulatory guide generally builds on existing ASIC guidance and does not introduce new regulatory concepts. The guide also provides guidance on some issues which are specific to digital advice, such as the ways in which digital advice licensees should monitor and test their algorithms and the minimum steps that digital advice providers should take to comply with the best interests duty when providing ‘scaled advice’ (personal advice limited in scope).

For those who wish to understand the regulatory obligations in respect to the provision of digital advice, Regulatory Guide 255 is a good starting point.

Further information can be found here.