Providers of digital advice must have at least one responsible manager who meets minimum training and competence standards for advisers, according to new guidelines from the Australian Securities and Investments Commission (ASIC).

The regulator will give digital advice licensees that fall short on this measure six months to comply.

Some of the 38 submissions to ASIC’s consultation on the model called for a filtering process before consumers are provided with digital advice, meaning only those suitable to receive such advice would do so.

ASIC says its guidelines allow a filtering process when it is in a client’s best interests.

Operators would be required to provide statements of advice in the same way as traditional advice models.

“The requirement for disclosure to be clear, concise and effective applies equally to digital disclosure,” the regulator says.

ASIC has rejected calls for third-party testing of algorithms.

“We agree with the majority of submissions received that requiring digital advice licensees to engage an independent third party to monitor and test their algorithms would be overly burdensome and may be prohibitively costly.”

ASIC Deputy Chairman Peter Kell says the regulator wants to encourage digital advice that may help consumers.

“Our guidance on regulating digital advice is a useful starting point for those providing or intending to provide digital advice in Australia,” he says.

“ASIC supports the development of a healthy and robust digital advice market in Australia as a convenient, low-cost option for retail clients. Our guidance will help ensure consumers can have confidence when they deal with digital advice providers.”