This is the first part of a blog series about how automated
advice providers can ensure compliance with the best interests
duty. In this blog entry, we will consider the best interests duty.
Importantly, the same law applies where advice is provided by a
person or by digital means. We will examine some of the challenges
that arise when providers offer automated advice.
The best interests duty
Section 961B of the Corporations Act 2001 (Cth) ("the
Act") requires a provider of financial product advice to act
in the best interests of the client in relation to the advice. This
duty will be satisfied if the provider proves that it has met the
following safe harbour requirements.
The provider must first identify the objectives, financial
situation and needs of the client. Next, they must identify the
subject matter of the advice. Then they must identify the
client's relevant circumstances. This refers to the objectives,
the financial situation and the needs of the
