Financial Robots as Instruments of Fiduciary Loyalty

(2018) 40 Sydney Law Review 63

UNSW Law Research Paper No. 18-59

31 Pages Posted: 6 Nov 2019

See all articles by Simone Degeling

Simone Degeling

UNSW Australia - Faculty of Law

Jessica Hudson

University of New South Wales (UNSW) - Faculty of Law

Date Written: 2018

Abstract

Retail financial consumers increasingly interact with financial services providers via a financial robot that is driven by an algorithm or other mathematical model (‘robo financial advice’). In this sector, the focus of industry and legal participants is on statutory regulation under the Corporations Act 2001 (Cth) and associated class orders and guidance issued by the Australian Securities and Investment Commission. We argue that despite compliance with this regime, significant legal risk remains. Equity continues to operate in a domain where fiduciary obligations, and attendant poorly managed fiduciary conflicts, arise systemically. This article considers the application of the fiduciary norm to robo financial advice. In doing so, it explores the interaction of equitable principle and statute, and pursues a deeper understanding of the application of equitable fiduciary principle to robo financial advice.

Keywords: Fiduciary Obligations, Robo Advice, Remedies

Suggested Citation

Degeling, Simone and Hudson, Jessica, Financial Robots as Instruments of Fiduciary Loyalty (2018). (2018) 40 Sydney Law Review 63; UNSW Law Research Paper No. 18-59. Available at SSRN: https://ssrn.com/abstract=3206371

Simone Degeling (Contact Author)

UNSW Australia - Faculty of Law ( email )

Kensington, New South Wales 2052
Australia

Jessica Hudson

University of New South Wales (UNSW) - Faculty of Law ( email )

Kensington, New South Wales 2052
Australia

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