Investors could soon be getting tips from 'robo-advisers'
Firms offering digital advisory services will still have to comply with safeguards
Investors could soon be getting financial tips from so-called "robo-advisers" that offer financial advice or portfolio management services - often at cheaper rates than their human counterparts.
The Monetary Authority of Singapore (MAS) has proposed to make it easier for digital advisory services providers to operate here by offering some major concessions under the financial regulatory framework.
One concession is allowing these digital or robo-advisers that operate as fund managers under the Securities and Futures Act (SFA) to offer their services to retail investors.
This could happen even if the robo-advisers do not meet track-record requirements, as long as they fulfil certain safeguards. An MAS consultation paper released yesterday proposed that there would not be separate licensing for digital advice.
But firms offering these services would have to comply with some safeguards.
One is that portfolios must be diversified and comprise non-complex assets.
The firms must have management staff with relevant experience in fund management and technology.
They must also undertake an independent audit of the business within a year of starting operations.
This is among several proposals by MAS to refine licensing and business conduct rules - aimed at supporting innovation in financial services. The public consultation ends July 7.
On why the MAS is proposing these moves, Mr Lee Boon Ngiap, MAS assistant managing director (capital markets), noted that some financial institutions, such as OCBC and UBS, have already started offering digital advisory services.
The MAS has also received growing indications of interest from other entities that want to offer such services to retail investors.
"Some are existing fund managers, and some are new start-ups by experienced investment fund managers from the industry," Mr Lee said.
The regulator has recently given in-principle approval for capital market services licences to be issued to Singapore-based digital wealth adviser StashAway and digital advisory platform provider AutoWealth.
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