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The Financial Markets Authority (FMA) announced yesterday it had opened applications for brokers and insurers seeking to offer personalised digital advice to their clients through digital platforms.
Under the current reading of the Financial Advisers Act (FAA) only a natural person may give financial advice. Reform to the FAA is expected to come into force in 2019, which will permit digital advice.
Until then, the FMA will allow financial advisers, insurers and other financial institutions the opportunity to apply to rely on its exemption powers and provide advice to their clients via an algorithm.
New Zealand is already behind the US, the UK, Canada and Australia in allowing brokers and insurers to provide digital advice to their clients, so after a consultation period with the industry, the FMA decided to grant its use.
When the law reforms are introduced in 2019, the exemption will be revoked.
