Advisers “should not wait for the regulator to come knocking,” says chief executive
The implementation of the FSLAB regime for financial advisers will be a “significant” priority for the FMA in the coming year, according to Chief Executive Rob Everett.
The FMA has released its Annual Corporate Plan (ACP), which sets out its objectives and priorities for the year ahead. It has introduced a sector-based approach this year, focusing specifically on regulation of the following four areas: capital markets, investment management, sales advice and distribution, and banking and insurance.
The FMA has also updated its strategic priorities, which will focus on governance, culture and deterring misconduct as well as promotion of public trust and confidence. Following its joint review of banking and insurance conduct and culture with the Reserve Bank, the FMA says it will now look for banks and insurers to demonstrate the following:
- Appropriate governance, systems and controls for managing conduct risk
- Design and management of incentive schemes that promote good customer outcomes
- Appropriate prioritisation of remediation when things go wrong
- Effective implementation of any new conduct regulation
The FMA will also be cooperating with the government to ensure a smooth transition into the new financial adviser regime.
“We will work closely with the Government and industry to prepare for and implement any changes to the conduct regulation regime for banks and insurers,” Everett said.
“Our ongoing work with the Reserve Bank of New Zealand on the conduct and culture reviews of the banking and life insurance sectors reflects our overall objective to improve standards of behaviour and ensure all providers are serving the needs of their customers.”
“We expect all market participants to review the risks we’ve identified in the sectors that impact them, assess the relevance of these risks, and what they are doing to mitigate them,” Everett added.
“Market participants should not be waiting for legislative changes, or the regulator to come knocking, to do the right thing.”
