1 Comment 1 Comment
This week the Financial Markets Authority publicly censured a registered financial adviser for cutting and pasting client signatures on to insurance applications forms.
In my view the regulator was right to do this after an investigation. Dealer group Preferred NZ was right to bring this matter to the FMA's attention. It isn't the first group to do this and it is their responsibility.
Reading the comments some people seem to think that cutting and pasting signatures on to applications forms is acceptable. It isn't hard to see that this behaviour is fraught with multiple risks.
It's important to put this incident into perspective for the future under proposed new financial adviser laws and regulations. If you haven't noticed the buzzword in financial services at the moment is conduct.
The conduct of all advisers and companies is under scrutiny. Cutting and pasting signatures is clearly poor conduct and it deserves addressing.
Under the new rules, Financial Advice Providers (FAPs) have to take responsibility for the advice their advisers give. In this case Preferred NZ is doing just that.
The FMA has been open in the past and said that it knows little about how the insurance advice sector works. If this is one of their early learnings, I'd suggest that they will be wanting to dig deeper into the businesses practices of this sector.
Advisers have been asking how they prepare for the forthcoming changes. For months now the message has been to look at your practices and business management. This is a good example of practices which should not be happening.
Some readers have questioned the FMA over this case. The simple answer is yes it is the judge and jury. Its processes are not fast (this was brought to their attention in April) nor are they transparent like the judicial system, but they have the power.
A public censure is not much more than a slap with a wet bus ticket. Hardly anyone in public arena will know about this and it doesn't appear censures are recorded against an adviser on either the Financial Services Provider Register or with their external disputes resolution scheme.
| « Lack of prescription could prompt race to the bottom | Mann on a mission to diversify financial advice » |
Special Offers
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved
This behavior and others that are similarly ethically challenged aren't wanted in our profession. It's fast becoming a case of shape up of ship out.
Reading between the lines on various articles and comments, the FMA already has a hit list of existing RFA’s it'll be chasing down once the new code and legislation applies. And that should concern more than a few