Kiwis could get access to online personalised financial advice by the end of the year under a proposal by the regulator - up to two years ahead of a law change.
The Financial Markets Authority has opened consultation on whether it should and how it would provide an exemption allowing firms to provide advice generated by a computer programme or algorithm.
While robo-advice is widely available around the world it is not currently allowed in New Zealand.
The Financial Advisers Act is in the process of being updated which would allow advice to be given by someone other than a "natural person" but it is not expected to come into force until 2019.
There is a big gap in the market for low-cost advice with research by the FMA showing the majority of New Zealand advisers provide advice to those with at least $200,000 in investable assets.
Liam Mason, director of regulation at the FMA, said it was proposing to use its exemption powers to allow robo-advice before the law change comes into force.
"We've been looking at ways to enable innovation to help tackle the advice gap in New Zealand, but also to mitigate the risk of poor consumer outcomes.
"We are seeking to ensure we maintain the standards of consumer protection provided by the legislation while encouraging innovation that can help more people get help with investment decisions."
Mason said robo-advice offered a way to address the low numbers of consumers currently receiving personalised financial advice.
The FMA's proposals would allow personalised robo-advice, subject to limitations and conditions to safeguard consumers.
Those include limiting it to financial advice and investment planning services and to a list of eligible products including KiwiSaver, other managed funds, listed debt and shares, governments bonds, general insurance, savings products and credit contracts.
It would exclude personalised advice on mortgages.
Companies who wish to provide robo-advice will have to tell the FMA and make "good character" declarations.
They will also have to prove they have the capability by having the right people with appropriate expertise in the technology and algorithms as well as people who can oversee and review the advice generated.
Investor safeguards to filter out people who are not suited to receive the robo-advice would also be needed.
Submissions for the Consultation close on July 19.
The FMA said it was aiming to have any exemption in force by late 2017.