FMA 'open to discussion'

Professional associations have had a growing dialogue with the Financial Markets Authority over the past two years and it is bearing fruit for advisers, a PAA board member says.

Friday, July 11th 2014, 6:00AM

by Susan Edmunds

Angus Dale-Jones said there was a general trend of knocking the regulator for the added burden that regulation placed on the financial services industry. But he said that needed to be put in context.

Associations had been meeting the FMA each quarter for the past two years to discuss the issues that were relevant to advisers.

“The regulator has shifted to become more open to understanding the adviser point of view,” he said.

That had been especially clear with the implementation of two new regulatory requirements – the annual AML report and annual information return submitted by AFAs.

“Professional associations have spent hours and hours on the behalf of advisers talking about the practicalities of obtaining this information.”

He said the FMA had been responsive and made an effort to adjust what they were asking for to take into account the impact it would have on advisers.

The information return was shortened from more than 70 questions to 40 in the final version. Many questions advisers had objected to, such as those about income, were removed. “They’ve made it clear advisers can use a best estimate, it doesn’t require absolute precision. That gives them good information but gives the adviser flexibility, they don’t have to do huge spreadsheets of minute data.”

Dale-Jones said: “It’s not always the profession agreeing but at least working with the regulator we can get to a position of lower noise for advisers.”

He said the conversations were not one-sided. “What we’ve got to is accepting that regulation is going to be there for members. To the extent that we can make regulation more meaningful and do things to make the regulator more aware of the reality of what members face, it’s a win/win.”

He said it was hard to say how long the shorter information return would take to fill out because it would vary depending on different business models.

He said the AML report looked more daunting than it was because it contained questions that were relevant to all reporting entities, not just advisers. “It’s asking questions that are relevant to casinos.. once you realise how much is unlikely to apply to financial advisers, it’s less overwhelming.”

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