ASIC has released a consultation paper which discusses the licensing and regulatory issues associated with online calculators.

The paper contains proposals for 3 types of calculators:
(a) generic calculators;
(b) product-specific calculators; and
(c) risk profilers.

ASIC distinguishes them as follows:

"Generic calculators
1.2 Generic calculators are:
(a) mathematical tools (i.e. they only produce numerical results)
(b) that do not produce results relating to one or more specific financial products.

1.3 Examples of generic calculators include the following (but only where they do not relate to specific financial products):
(a) savings calculators;
(b) managed investment calculators; and
(c) life insurance calculators.

1.4 Typically, generic calculators help the user calculate:
(a) the estimated value of total savings or investments at a future point in time; and/or
(b) the estimated level of saving, investment or life insurance cover required to achieve a particular financial goal.

Product-specific calculators
1.5 Product-specific calculators are:
(a) mathematical tools (i.e. they only produce numerical results)
(b) that produce results relating to one or more specific financial products.

1.6 Examples of product-specific calculators include:
(a) calculators that are connected to promotional material for a named financial product (e.g. by including a link to the Product Disclosure Statement for the product or a link to ‘Apply now’ on the calculator’s results page);
(b) superannuation or managed investment calculators that allow the user to select, perform calculations on, and compare the estimated performance of named financial products (or investment strategies within a product);
(c) life insurance calculators that enable the user to calculate the sum insured (i.e. the amount of insurance they should take out) as part of the process of applying for, or obtaining a quote for, a specific life insurance product; and
(d) warrant calculators that enable the user to calculate and compare the projected income and taxation for specific instalment warrant products.

Risk profilers
1.7 Risk profilers are tools that, based on the user’s answers to a series of questions about investment preferences, assess the user’s attitude to risk.

1.8 Risk profilers are generally not mathematical tools (i.e. they do not produce numerical results). Although the result may be derived using mathematical formulae (e.g. by assigning the user’s answers scores and using the total to produce a result), the results themselves are not numerical (e.g. the output is that the client has a risk weighting, such as ‘conservative’ or ‘aggressive’)."

Comments are due by 23 September.