Providers will operate under an exemption from the current Financial Advisers Act.

When the Financial Services Legislation Bill takes effect, making personalised roboadvice possible, the exemptions will be revoked.

Liam Mason, FMA director of regulation, said, “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.

"An FMA review of KiwiSaver sales in 2015 found only three in 1000 KiwiSaver sales or transfers occurred with personalised advice. 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.”

The FMA consulted on whether to grant an exemption to enable personalised digital advice to be provided under the current regime because it was being increasingly widely adopted off-shore. 

Providers of personalised digital advice will not be licensed by the FMA.

Any provider seeking to rely on the exemption must apply to the FMA showing its directors and senior managers meet good character requirements. The provider must also meet minimum standards demonstrating their capability and competency to provide the digital service.

The exemption will be granted subject to conditions that require providers to take an appropriate degree of care to ensure consumer protection safeguards are in place. The conditions are consistent with the requirements that apply to AFAs.

Providers are not able to offer personalised digital advice until they are named in the schedule to the exemption notice