Automated financial advice has been around for quite some time. Usually a bank or a broker will type your details into computer software and rely on algorithms to advise you, especially if you’re a small time investor.

However these days, more and more investors are digital natives, savvy when using online platforms and more trusting of computer generated financial advice, says Marco Navone from UTS. So startups in Australia are now offering these consumers direct access to the algorithms, cutting out the middle man.

In the United States, a growing number of smaller firms are working on better platforms for automated financial advice and their market share is also growing. In such a crowded space both Australian and US startups will have to develop better algorithms and machine learning applications (for example, based on investors on-line behaviour, analysed in real time) to be unique, Navone says.

This also presents some challenges for regulators who now have to figure out the best way to test the quality of these algorithms.