Name
Global FinTech Guide
Country _ Name
Nigeria
SectionTitle
Financial advisory and broking services including robo advisory and auto-trading
Body
FinTechs belonging to this category offer advisory and broking services for investments usually via an internet platform.

Robo advisory services usually offer an investment proposition following a series of questions concerning the personal financial background and the risk-bearing capacity of the user. Sometimes the respective platform also enables the user to directly execute the proposed investment. 

Auto-trading concerns all services which automatically trade on behalf of the customer according to his or her specifications.

Apart from that some FinTechs collect and offer merely or as an ancillary service market information or operate comparison portals to increase the transparency of the capital markets and to help the investor with his decision-making.

There are also FinTech-advertising-services which advertise various financial services or products.

Introduction

Attitude of the country towards modern financial advisory and broking services

There has been a reasonable level of adoption of robo-advisory services in Nigeria as a significant part of the market activity has incorporated the use of algorithms. The consumer’s reaction to these services has also been positive as they are willing to explore simpler ways to invest.

The SEC in 2021, issued its Rules on Robo-Advisory Services to regulate the adoption and deployment of Robo-Advisory services in the Nigerian capital market. This makes it the first regulation governing robo-advisory services in Nigeria. Some Fintech services providers are leveraging the SEC’s corporate investment adviser licence category to provide this service.
One of the features of some Fintech offerings in this area is auto-trading which can also be facilitated by the Nigerian Exchange Group’s (“NGX”) platform. More on this below.


Legal affairs

Obligations and requirements to provide financial advisory and broking services, or ancillary services described above

Robo-advisors are subject to the regulatory purview of the SEC. The operation of these services is governed by the SEC Rules on Robo-Advisory services (the “SEC Rules”). The SEC Rules require registration before one can operate as a Robo-Advisor. Robo-advisory services are equally subject to the SEC Rules on Corporate and Individual Advisers (Rule 96 of the SEC Rules and Regulations, 2013). The applicable business conduct requirements by the Investment and Securities Act, 2025 (“ISA”) as contained in regulations issued pursuant to the ISA are also applicable to robo-advisory services. It is also required that a robo-adviser who wishes to perform the function of portfolio management apply to the SEC to be registered as a Fund/Portfolio Manager and equally comply with the applicable Rules and Regulations governing Fund/Portfolio Management function. It is also noteworthy that where a robo-adviser outsources to a third party, it is required to conduct due diligence on the said party but not required to register the said third party.
To provide automated trading services on the other hand, the NGX carries out the Automated Trading System (ATS) Brokers’ certification program, a 15-day training course; the completion of which successful participants will be inducted as Authorized Dealing Clerks of The Nigerian Exchange. Both robo-advisors and auto-traders are subject to the SEC Rules and ISA provisions as regards rendering of financial services.

Additional comments regarding the legal situation for financial advisory and broking services, or adjacent services or what FinTech’s must be aware of in this business area

FinTechs belonging to this category are also required to ensure that the data provided by their users and stakeholders are protected and secured in line with the applicable data protection statutes in Nigeria. They are also required to maintain and be guided by robust KYC/AML policies. This is to mitigate against financial fraud including financing terrorist activities. The KYC/AML policy of every FinTech Company must be in line with requirements provided by existing laws, regulations, and international best practices.


Economic conditions

Market size for financial advisory and broking services as well as adjacent services and biggest companies in this business area

There is no particular data as to the size of the Nigerian financial advisory sector. Some of the biggest companies offering financial advisory services include, FBNQuest, Merchant bank, Matog consulting limited, NOVA merchant bank limited, Cowrywise, among others.

Additional comments regarding the economic situation for financial advisory and broking services as well as adjacent services or what FinTech’s must be aware of in this business area

Economic factors like interest rates, inflation, and regulations change significantly and advisors need to stay informed about these changes and their potential effects on asset prices. Also, technological advancements such as artificial intelligence and blockchain offer opportunities for firms to enhance services and operational efficiency, however, Fintech companies must be ready to stay competitive. Demographic trends and globalization further complicate the economic landscape, requiring firms to understand diverse regulatory environments and market dynamics to navigate the industry successfully.


Authors

NameOrganisationEmail
Ebimobowei JikenghanG Elias[email protected]06346
Eberechukwu Ezike [email protected]0 

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