Sydney-based Australian financial services licensee, Lime FS, has agreed to close down two digital advice tools following concerns raised by ASIC.
Lime FS’ corporate authorised representatives, Plenty Wealth and Lime Wealth, are digital advice providers authorised to provide personal financial advice to consumers.
After reviewing a sample of advice files from Plenty Wealth and Lime Wealth, ASIC raised its concerns with Lime FS about the quality of advice being generated by the online tools and Lime FS’ ability to monitor the advice.
Plenty Wealth provided advice via an online tool on:
- Life insurance reviews
- Budgeting analysis
- Tax
- Investment and superannuation recommendations
Lime Wealth provided advice via an online tool on:
- The establishment of self-managed super funds
- Purchasing property with superannuation
- Commencing and ceasing pensions
- Contributions into superannuation
The regulator stated in its release that it was concerned the level of inquires made by the online tools about client objectives, financial situation and needs, were inadequate.
It noted that in some instances, the recommendations generated by the tools were in conflict with client goals or with other recommendations also generated by the tools.
As a result of these concerns, Lime FS chose to close down both online tools for the foreseeable future.
“…the advice must be appropriate to the client and comply with the best interests duty.”
ASIC Commissioner, Danielle Press, said, “Digital advice tools offer a convenient and low-cost alternative to consumers who may otherwise not seek personal financial advice.
“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,” she said.
Press added: “ASIC expects AFS licensees and financial advisers using or recommending digital advice tools to ensure that they adequately monitor and test the advice for quality and appropriateness.”
