Lime FS Pty Ltd has agreed to shut down “digital advice tools” following concerns raised by the Australian Securities and Investment Commission (ASIC).
According to ASIC, Lime has voluntarily shut down two digital advice referenced as robo advice.
Lime FS’ corporate authorised representatives, Plenty Wealth Pty Ltd (Plenty Wealth) and Lime Wealth Pty Ltd (Lime Wealth), are digital advice providers authorised to provide personal financial advice to consumers.
ASIC stated that Plenty Wealth provided advice via an online tool about budgeting analysis, life insurance reviews, tax, investment and superannuation recommendations. Lime Wealth provided advice via an online tool about the establishment of self-managed super funds (SMSFs), purchasing property with superannuation, commencing and ceasing pensions, and contributions into superannuation.
After reviewing a sample of advice files from Plenty Wealth and Lime Wealth, ASIC expressed concern “about the quality of advice being generated by the online tools and Lime FS’ ability to monitor the advice.”
ASIC was also concerned that the level of inquiries made by the online tools about client objectives, financial situation and needs, were inadequate. According to ASIC, in some instances the recommendations generated by the tools were in conflict with client goals or with other recommendations also generated by the tools.
Lime FS decided to close down both online tools for the foreseeable future as a result of ASIC’s concerns.
ASIC Commissioner, Danielle Press commented on Lime’s move:
“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. 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.”