New Zealand’s Financial Markets Authority (FMA) has begun taking applications for permission to offer robo-advice through digital tools and platforms.

The law currently requires humans to give personalised financial advice to retail clients, but the FMA is offering temporary exemptions before reforms due next year that will permit digital advice.

“The decision to allow providers to offer personalised digital advice gained wide support from the market during consultations last year, including from both small start-ups and large financial institutions,” FMA Director of Regulation Liam Mason said.

Digital advice, generated by algorithms and usually delivered on a website or software application, is increasingly being adopted in international markets.

The FMA, which has a mandate to promote innovation and flexibility, says exemptions will be granted subject to providers taking “an appropriate degree of care” and ensuring consumer safeguards.

Providers must show directors and senior managers meet good character requirements and can demonstrate competence to provide the digital service.

“We believe the introduction of personalised digital advice has the potential to improve consumer access to financial advice, especially for those with smaller sums to invest and KiwiSaver members,” Mr Mason said.

KiwiSaver is New Zealand’s work-based retirement savings program.