New Zealand financial sector will be able to provide their clients with unprecedented online advice from next year and a leading fintech expert today urged companies to start looking to the process sooner rather than later as the FMA is expecting substantial submissions early next year.
FinTechNZ general manager James Brown says Kiwi companies will not need to wait until the Financial Advisers Act (FAA) is reformed in 2019, according to the Financial Markets Authority (FMA).
“The announcement comes after 49 submissions, the majority in strong support of online robo-advice, were received by the authority.
“The FMA says it would not impose financial limits on robo-advice and has expanded the eligible product list to include personal insurance products, mortgages and investment such as Kiwi Saver.
“I think you will see health, wealth and insurance become the first sectors of choice. So, what is robo-advice? It’s an online automated portfolio management service. Robo-advisors can offer their services for a fraction of the current cost. The benefits to New Zealand companies are less capital required, provide quicker response and offer more consistency in advice given.
“Local companies such as Ilumony are harnessing technology to shape and create the future of personal finance and investment. Meet Jude wants to create a simple, clean, personalised and customised banking experience. They want a robo-adviser to help with finances, pay their bills on time and possibly look for savings and investment opportunities.
“It takes a lot for smaller, independent companies to maintain their footing amid a slew of new launches, but Betterment and Wealthfront have managed to do that.
“They have pioneered the industry and they remain the best two options for most investors, due to their low account minimums, easy-to-use interfaces and innovative features. Both robo-advisors offer automatic rebalancing, tax-loss harvesting and diversified portfolios.
“Both companies have been operating in the United States for some time. New Zealand is behind the US, the UK, Canada and Australia because of a clause under the FAA. However, now that will change. I appeal to NZ companies to start looking to the process sooner rather than later.”
Meanwhile, Brown says the latest TIN100 report has shown that the tech sector has broken the $10 billion barrier for the first time and is now the third largest contributor towards New Zealand’s GDP. FinTech is the fastest growing tech sector with more than 48 percent growth since last year.
The new government will be keen to talk to the fintech sector about the opportunities and challenges, he says.
For further information contact Make Lemonade NZ editor-in-chief Kip Brook on 0275 030188.
Photo: James Brown
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