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Automated advice and Fit and Proper

During the recent Moonstone Regulatory Update Workshops, Billy Seyffert, COO of Moonstone Compliance and Risk Management alluded to rather stringent requirements for those who plan to go this route.

The FPI recently conducted a Robo-Advice Survey. Interestingly, close to 50% of the respondents indicated that they believe that regulators should monitor the progress and standards around robo-advice.

The proposed new Fit and Proper requirements already contain guidelines as to what will be required to be able to operate in this space.

Automated advice is defined as the furnishing of advice through an electronic medium that uses algorithms and technology without the direct involvement of a natural person.

An FSP who wishes to provide automated advice must have at least one key individual who –

a. meets the competence requirements applicable to a key individual of a Category I FSP; and
b. has technological knowledge, skills and experience to –
(i) understand the technology and algorithms used to provide the automated advice;
(ii) understand the methodological approaches and assumptions embedded in the algorithms and the rules underpinning the algorithms;
(iii) identify the risks to customers arising from the automated advice; and
(iv) monitor and review the automated advice generated by algorithms to ensure quality and suitability of the advice and compliance with the Act.

This very relevant topic will be discussed in detail at the FPI Professionals Convention at the Century City Conference Centre in Cape Town on 19 – 20 October 2017.


One Response to Automated advice and Fit and Proper

  1. Steve Manning 13 October 2017 at 11:32 am #

    This will play a huge part of financial planning in the future.

    I think the definition is “light” but cant see any holes?

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