Do robots give suitable advice? ESMA proposes updates to suitability guidelines to address robo-advice.

Given the technological evolution of the advice market, firms offering a robo-advice service are faced with a challenge — ensuring that the advice given by a robo-advisor is suitable. ESMA has taken advantage of the more general updates to the suitability requirements under MiFID II to incorporate its views on the robo-advice market into the 13 July 2017 consultation paper on “Guidelines on certain aspects of the MiFID II suitability requirements”. The proposed Guidelines will replace the existing Guidelines on suitability under MiFID I, published by ESMA in 2012.