Tax, super robo-advisers shut down following ASIC concerns
Two robo-advice tools that dished out tax and superannuation advice have now been voluntarily shut down after concerns were raised by ASIC.
Sydney-based Australian financial services (AFS) licensee Lime FS Pty Ltd has voluntarily shut down two digital advice tools, Plenty Wealth Pty Ltd and Lime Wealth Pty Ltd.
Digital advice, also known as robo-advice, is the provision of automated financial product advice using algorithms and technology, without the direct involvement of a human adviser.
Plenty Wealth provided advice via an online tool about budgeting analysis, life insurance reviews, tax, investment and superannuation recommendations. Lime Wealth provided advice via an online tool about the establishment of self-managed super funds (SMSFs), purchasing property with superannuation, commencing and ceasing pensions, and contributions into superannuation.
After reviewing a sample of advice files from Plenty Wealth and Lime Wealth, ASIC raised concerns with Lime FS about the quality of advice being generated by the online tools and Lime FS’ ability to monitor the advice.
The corporate regulator was concerned that the level of inquires made by the online tools about client objectives, financial situation and needs were inadequate. In some instances, the recommendations generated by the tools were in conflict with client goals or with other recommendations also generated by the tools.
Lime FS decided to close down both online tools for the foreseeable future as a result of ASIC’s concerns.
“Digital advice tools offer a convenient and low-cost alternative to consumers who may otherwise not seek personal financial advice,” said ASIC commissioner Danielle Press.
“However, the advice provided through these tools must meet the same legal obligations required of human advisers — the advice must be appropriate to the client and comply with the best interests duty.”
Consumers concerned about advice received from the two digital advice tools can lodge a complaint with Lime FS via its internal dispute resolution process, notify the Australian Financial Complaints Authority, or contact their current financial adviser or obtain independent legal advice.