The Actuaries Institute believes it is too early to develop regulations for robo-advice.

“We believe this area is too complicated and fluid at this point to benefit from detailed regulations,” it says in a submission to the Australian Securities and Investments Commission’s (ASIC) consultation paper on automated advice.

“We suggest the area will develop best if providers of robo-advice are required to obtain appropriate professional advice.”

Unsurprisingly, actuaries and accountants are proposed to fill this role.

The institute argues its members can deliver in-depth training on “the subtleties of the various issues involved” and professional discipline to limit commercial excesses.

The submission says ASIC has too much detail in its paper, and it is not principles-based.

“While we accept there are those in the industry that want additional guidance, we suggest responding to these requests moves the focus of responsibility for the development to the regulator rather than the providers,” the submission says.

“We do not believe it adds any information that a professionally trained reviewer of a robo-advice algorithm would not already know.”

The institute argues ASIC’s proposals will not create better outcomes for consumers.

“[The paper] is too general to act in any way to enforce better outcomes, but rather focuses on processes that may well add no value to the final outcomes. Overall it adds another layer of compliance to no purpose.”

The institute supports ASIC’s proposal for robo-advice providers to pass an exam, complete practical professional training and meet ethical standards.

“It requires considerable judgement and experience to distil financial advice into algorithms,” the submission says.

“We support proposals to raise the professional, ethical and educational standards of advisers providing personal advice.”