The partnership with Plenty Plus, which operates under its own AFSL, allows accountants to generate advice without the need for their own license.
Advice fees will also be calculated per transaction with no additional sign-up or ongoing fees.
Class chief executive Kevin Bungard said the importance of financial advice for SMSFs has been brought into sharp relief by the introduction of the super reforms.
“The impact of the super reforms on SMSF members and other investors frequently sees them needing advice beyond tax and compliance issues,” Mr Bungard said.
Plenty Plus co-founder and general manager Josh Golombick said the company is excited about being integrated with the cloud SMSF software provider.
“We look forward to offering Class SMSF members the advice and financial planning services that will help them meet their retirement and broader financial goals,” Mr Golombick said.
In response to the comments above:
(1) When accountants use In response to the comments above:
(1) When accountants use https://plentyplus.com.au, it is not the accountants who are providing the advice. Rather, they are collecting information from their clients and passing that information on to Plenty Plus so that Plenty Plus can provide the advice under its license. For the accountant to fulfil their duty it is important that they make it clear that the advice was provided by Plenty Plus, and not by the accountant themselves. There are parallels with accountants obtaining other professional services for their clients such as trust deeds, complex tax advice, and actuarial certificates. For example, trust deeds can only be provided by lawyers and actuarial certificates by actuaries. Yet accountants can play an important role in facilitating their clients obtaining these documents.
(2) Plenty Plus meets the requirements of the Best Interest Duty by complying with the relevant sections of the Corporations Act. For example, section 961E states: “It would reasonably be regarded as in the best interests of the client to take a step, if a person with a reasonable level of expertise in the subject matter of the advice that has been sought by the client, exercising care and objectively assessing the client’s relevant circumstances, would regard it as in the best interests of the client, given the client’s relevant circumstances, to take that step.” Plenty Plus collects the same information that a human adviser would collect, and uses the same decision rules that a human adviser would use, to come to the same conclusions. If anyone would like to trial the Plenty Plus service, I suspect you will find that it produces the same advice that a human adviser would typically provide. You will also find that the process is much easier and faster than dealing with a human adviser. And if you have any specific improvements you think could be made to our advice then please let us know so we can further improve the experience for our clients.
(3) The Robo Advice guideline you refer to is called Regulatory Guide 255. Nowhere does it state “it does not matter what is told to the client”. Rather, it states “obligations applying to the provision of traditional (i.e. non- digital) financial product advice and digital advice are the same”. That is, digital advisers need to comply with the same regulations as human advisers. The Guide goes into great detail on how digital advice providers can comply with those regulations. We believe that Plenty Plus complies with the requirements of the Regulatory Guide.
(4) I think you will find that ASIC does care strongly about monitoring digital advice. Through the ASIC Innovation Hub and ASIC’s surveillance activities, I believe they have communicated with around 15-20 digital advice businesses, to ensure that those businesses are delivering (or will deliver) advice in a compliant manner. This is very different from property where the government has not given ASIC the regulatory power to supervise the industry.
(5) ASIC would encourage you to develop apps and digital advice tools, as long as those tools are compliant. ASIC has stated that they believe that digital advice has the potential to be a convenient and low-cost option for retail clients who would otherwise not have sought advice. As an industry we should recognise that advice services are expensive, which is why 80% of the community don’t get advice. If we truly believe that good advice can help people then we should all be in favour of ways to deliver that advice more cost effectively.
, it is not the accountants who are providing the advice. Rather, they are collecting information from their clients and passing that information on to Plenty Plus so that Plenty Plus can provide the advice under its license. For the accountant to fulfil their duty it is important that they make it clear that the advice was provided by Plenty Plus, and not by the accountant themselves. There are parallels with accountants obtaining other professional services for their clients such as trust deeds, complex tax advice, and actuarial certificates. For example, trust deeds can only be provided by lawyers and actuarial certificates by actuaries. Yet accountants can play an important role in facilitating their clients obtaining these documents.
(2) Plenty Plus meets the requirements of the Best Interest Duty by complying with the relevant sections of the Corporations Act. For example, section 961E states: “It would reasonably be regarded as in the best interests of the client to take a step, if a person with a reasonable level of expertise in the subject matter of the advice that has been sought by the client, exercising care and objectively assessing the client’s relevant circumstances, would regard it as in the best interests of the client, given the client’s relevant circumstances, to take that step.” Plenty Plus collects the same information that a human adviser would collect, and uses the same decision rules that a human adviser would use, to come to the same conclusions. If anyone would like to trial the Plenty Plus service, I suspect you will find that it produces the same advice that a human adviser would typically provide. You will also find that the process is much easier and faster than dealing with a human adviser. And if you have any specific improvements you think could be made to our advice then please let us know so we can further improve the experience for our clients.
(3) The Robo Advice guideline you refer to is called Regulatory Guide 255. Nowhere does it state “it does not matter what is told to the client”. Rather, it states “obligations applying to the provision of traditional (i.e. non- digital) financial product advice and digital advice are the same”. That is, digital advisers need to comply with the same regulations as human advisers. The Guide goes into great detail on how digital advice providers can comply with those regulations. We believe that Plenty Plus complies with the requirements of the Regulatory Guide.
(4) I think you will find that ASIC does care strongly about monitoring digital advice. Through the ASIC Innovation Hub and ASIC’s surveillance activities, I believe they have communicated with around 15-20 digital advice businesses, to ensure that those businesses are delivering (or will deliver) advice in a compliant manner. This is very different from property where the government has not given ASIC the regulatory power to supervise the industry.
(5) ASIC would encourage you to develop apps and digital advice tools, as long as those tools are compliant. ASIC has stated that they believe that digital advice has the potential to be a convenient and low-cost option for retail clients who would otherwise not have sought advice. As an industry we should recognise that advice services are expensive, which is why 80% of the community don’t get advice. If we truly believe that good advice can help people then we should all be in favour of ways to deliver that advice more cost effectively.
“it allows accountants to generate advice without the need for their own license”
how can this service offering be lawful? it sounds like a legislative workaround that will attract regulatory attention
financial advice is not like actuarial certificate provision
an accountant can’t sub-contract it out to a licensee – it requires a direct fiduciary relationship between a licensee and the client,
and it’s hard to see how a ‘press button’ advice-generator could fulfil the best interests duty
I’ve complained to ASIC and was advised that it was Robo Advice and therefore OK with a link being provided to ASIC’s Robo Advice guidelines. I haven’t read them but apparently if a computer makes a recommendation it doesn’t really matter what is told to the client. Personally I can’t see how it is legal but ASIC are happy so we may as well all try to develop apps or alternatively sell people over priced property in their SMSF’s as ASIC don’t really care about the people that do that either.
Perhaps read the regulatory guidance to learn more about how digital advice works: http://asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-255-providing-digital-financial-product-advice-to-retail-clients/
The accountant would be generating digital advice with the appropriate disclosures, not providing any recommendation or statement of opinion of their own.
Thanks Ed, very useful