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The Financial Markets Authority (FMA) announced last week it would open applications by the end of the month for financial institutions and financial advisers to apply to rely on the robo-advice “digital advice” exemption.
The FMA said that it believed over time digital advice would become a significant channel from which financial advice could be accessed, although it stated ‘in-person’ broker advice would continue to be the dominant channel for the immediate future.
In October last year, the FMA announced that it would use its exemption powers under the current reading of the Financial Advisers Act (FAA) to allow robo-advice to be used in New Zealand under a licence structure. The Financial Services Legislation Bill (currently in select committee stage) will replace the Financial Advisers Act once passed.
The FMA received 49 submissions during the consultation period from various financial institutions and organisations such as insurers and banks.
The regulator expanded the eligibility of product suites to include personal insurance products, mortgages and investments such as KiwiSaver.
New Zealand is behind other OECD countries, such as the UK and Canada, that already allow digital advice to be produced by a ‘non-human’.
The FMA said last year it had proposed the exemption in order to foster and promote innovation within financial markets and to improve consumer access to online financial advice, and financial advice in general.
In early December, the FMA emailed all financial advisers registered on the Companies Office’s Financial Services Providers Register to gauge their interest in receiving further information on the pending regime changes that will affect AFAs (Authorised Financial Advisers), RFAs (Registered Financial Advisers) and QFEs (Qualifying Financial Entity).
The FMA said it wants help preparing financial advisers for the changes and will be running workshops and other activities this year. Brokers can visit the FMA’s website for more information on the changes and the support available to them.
The Financial Services Legislation Bill (currently in select committee stage) will replace the Financial Advisers Act once passed.
