Robo-advice should have to comply with the same rules as traditional models, New Zealand life insurers and advisers say.

Submissions to the Ministry of Business, Innovation and Employment’s review of financial advice argue the rules should apply even if the advice provider is offshore.

The Institute of Financial Advisers also calls for “individual ethical licensing of an adviser, who gives advice, or a director of an entity where no adviser exists. All forms of advice should be held to the same standard of ethics, so any platform… should be able to show they meet this requirement.”

The association accepts a need for rule changes to cover the way advice is delivered.

“Personal advice is face to face and robo-advice is remote. There will be a need for some specific benchmarks for technology advice to comply with.”

AMP’s submission says because robo-advice will be accessed by large numbers of consumers, it must be subject to higher capital requirements.

“Any regulation around technological channels should not be so specific as to restrict or prevent innovation,” it says.

“We submit the law should not require providers to give consumers the option to speak to a person qualified to provide advice to discuss investment needs, but rather questions such as these should be answered by the market.”

AMP says laws concerning robo-advice can be added to current legislation.

Fidelity Life also says robo-advice “should be subject to the same obligations and requirements as human financial advisers. In that respect the legislation should be technology neutral.”

It says legislation should also take account of potential risks exclusive to robo-advice, “particularly if the provider of the advice is located overseas. For that reason, all providers of robo-advice platforms should be licensed by the Financial Markets Authority.

“The licensing requirements should include fit and proper requirements for senior managers and directors and… appropriate financial resources and insurance.”

Suncorp Life agrees robo-advice providers should operate under the same regulations as other advisers, but says the sector should be encouraged.

“We agree that permitting robo-advice has the potential to support the provision of more affordable advice to a larger range of consumers. We support legislative change to allow financial service providers to keep pace with changing technology.”

Suncorp says only licensed entities should be permitted to offer robo-advice.

“Those entities should be subject to licensing conditions requiring clear disclosure – particularly of the limits of the advice – ethical obligations to ensure advice is suitable and oversight of a regulatory body.”