FMA still waiting for first robo applications

Roboadvice is off to a slow start in New Zealand.

Friday, March 2nd 2018, 6:00AM

by Susan Edmunds

The Financial Markets Authority last week announced it was open to applications from providers who wanted to offer personalised financial advicer to consumers via rogbo platforms.

Liam Mason, its director of regulation, said: “The decision to allow providers to offer personalised digital advice gained wide support from the market during consultations last year, including from both small start-ups and large financial institutions.

“An FMA review of KiwiSaver sales in 2015 found only three in 1,000 KiwiSaver sales or transfers occurred with personalised advice. We believe the introduction of personalised digital advice has the potential to improve consumer access to financial advice, especially for those with smaller sums to invest and KiwiSaver members.”

Many of the product providers are working on their offerings and it was expected that there could be products in the market by March.

Providers are not able to offer personalised digital advice until they are named in the schedule to the exemption notice.

But the FMA has not yet received any applications by Wednesday afternoon.

“A small number of providers have expressed an interest to us in using the exemption in the coming months. This aligns with our expectations following the two consultations we carried out before enabling the digital advice exemption,” a spokesman said.

Michael Naylor, of Massey University, said it was surprising.

"Good roboadvice is not easy so there is a large gap between saying you are keen to enter and being developed enough to actually bother to register. Applications will come, but I can't see it being more than a few initially. A lot of currently roboadvice is portfolio-based, or very generic."

Tags: roboadvice