This is the second part of a blog series about how automated advice providers can ensure compliance with the Best Interests Duty. This entry will address some of the measures digital advice providers can take to ensure compliance with the Act, drawing on ASIC’s recent Consultation Paper (CP 254) and draft Regulatory Guide (RG 000). Read the first blog here.
What does ASIC recommend?
ASIC has made numerous proposals as to how a digital advice provider can ensure compliance with the best interests duty and meet the safe harbour requirements.
A. Scoping or Scaling
Scaling means that personal advice is limited in scope. All personal advice is scaled to some degree. Traditional financial product advice usually involves the adviser limiting the scope of their advice via a conversation with the client. In the context of digital advice, however, conversations will not always take place because no natural person is providing the advice. ASIC has, therefore, outlined specific minimum expectations for digital providers offering scaled advice.
