FMA issues second robo advice licence

Nikko Asset Management has been granted an exemption to provide personalised digital investment advice by the Financial Markets Authority (FMA).

The decision makes Nikko AM NZ only the second financial services provider in New Zealand to be granted an exemption to the current law that says personalised advice to retail clients must be given by a natural person.

The exemption clears the way for Nikko AM NZ to launch an online service that will begin offering robo-advice to investors via a custom-made digital platform later this year.

Its platform will let users set financial goals and provide automated advice that’s backed up by the active management of Nikko AM’s domestic and international investment professionals.

Nikko AM managing director, George Carter says “Planning and setting savings and investment goals is something many of us know we should do, but often just don’t get around to. An online advice service that’s simple and easy to use, and helps you get comfort over your investment decisions, is clearly going to be of great value.”

“In being granted this exemption, Nikko AM NZ will be providing such a service to individuals later this year – basic advice that’s free for everyone to access, intuitive and available online 24/7. This development aligns with our values of innovation and commitment to helping people meet their financial goals, and follows on from our launch of the Nikko AM NZ KiwiSaver Scheme earlier this year, allowing Kiwis to invest directly with us for the first time.”

Comments from our readers

On 27 August 2018 at 3:26 pm Pragmatic said:

Interesting to see an increase in product manufacturers by-passing the advisory community with their own in-house distribution or gateways. It's much easier (and cheaper) to influence tied distribution that those pesky non-aligned AFAs

On 28 August 2018 at 8:35 am Eyeinthesky said:

"Nikko Asset Management has been granted an exemption to provide personalised digital investment advice by the Financial Markets Authority (FMA)......... granted an exemption to the current law that says personalised advice to retail clients must be given by a natural person."

I'm curious about the possibility of individual non aligned advisers being granted exemptions for legislative requirements in giving personalised advice. Would make the future somewhat easier for a number of us.

What do you say, FMA - seeing how you are loosening up the laws for corporates, how about cutting us advisers some slack??

On 28 August 2018 at 9:13 am Barry Read said:

My understanding is the exemption is only for the natural person requirement, all other rules apply the same as any other personlised advice provider.

On 28 August 2018 at 9:29 am Dirty Harry said:

Who writes the programs and algorithms that run the robots? Who sets the parameters that decide which investment mix and advice outcomes are recommended?
That's right. Humans.
The robots will be just as biased, as conflicted and as myopic as the individuals and institutions that build them - potentially more so because the outcomes are pre-built, totally pre-determined, and the consumer "discovers" them as they engage.
They are just as fallible as natural humans, if not more so.

On 28 August 2018 at 11:18 am dcwhyte said:

At the recent Lifetime Conference in ChCh, one of our guest speakers, David Haintz - previously of Shadforths, Australia - indicated that Roboadvice platforms across the Ditch had evolved beyond their original "robot" stage.

Further down the track with this type of distribution than we are here, the Australian experience has seen ever increasing levels of human intervention.

This suggests that despite the initial novelty of technology, investors are reluctant to rely on machines exclusively for such critical financial matters.

I recall debating with Baz Read a few years back at an IFA Xmas function in Wellington on the impact of Roboadvice. I maintained then and I stick by it now, that Roboadvice should be a great lead generation source for Financial Advisers

On 31 August 2018 at 3:49 pm Eyeinthesky said:

@Dirty Harry
You are quite right of course in that humans write the code.

There is a chilling aspect to algorithms that all of us need to be aware of.

This lengthy article is well worth the read, and makes specific mention of high frequency trading in share markets and how pricing is manipulated as a result.
https://www.theguardian.com/technology/2018/aug/29/coding-algorithms-frankenalgos-program-danger

So, who really knows what is going on with Roboadvice........ I would like to bet those doling out licences don't.

FMA issues second robo advice licence

Nikko Asset Management plans to offer a robo-advice service for its recently launched KiwiSaver scheme later this year.

Monday, August 27th 2018, 9:00AM 6 Comments

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