Sheriff almost run out of town

FMA chief executive Sean Hughes yesterday acknowledged the ill feeling caused by the ‘cowboy’ advertising campaign, and offered to turn down his invitation to open the IFA conference.

Thursday, July 14th 2011, 7:34AM 3 Comments

by Benn Bathgate

Hughes said he was well aware there had been "a very vocal response" to the advert and that his offer to decline the chance to speak had been turned down by IFA chief executive Peter Lee.

He also acknowledged advisers feel unfairly targeted in moves aimed at restoring investor confidence.

Hughes said part of the FMA's role, which he described as being "an economic ambassador for New Zealand," would inevitably mean the watchdog would ruffle feathers and occasionally have to take tough decisions.

He also said that as the new regulation is a "quantum leap" away from what had existed before, the FMA would inevitably take on legal cases to test the law and would not shy away from offending good advisers in pursuit of bad ones.

However, in a more conciliatory tone he said he envisioned the FMA being a partner to the adviser community, saying they both had important roles to play in restoring New Zealanders "shattered" confidence in capital markets.

He congratulated those advisers who had embraced the spirit of the new regulation, and warned non-compliant advisers that it wouldn't just be the FMA watching out for them but fellow advisers and customers.

Compliant advisers can look forward to a "great partnership" with the FMA, and will "take the lead in improving the lot of ordinary New Zealanders."

See what else he had to say to advisers here

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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Comments from our readers

On 14 July 2011 at 9:40 am Independent Observer said:

Unfortunately I did not hear Mr Hughes at the IFA conference – although have a few observations:

On the subject of Mr Hughes’ offer to decline the chance to speak at the conference: Whilst I’m personally disappointed at Mr Hughes attitude, I’m delighted that the IFA convinced him to “man-up”, and face his critics.

On the subject of the industry enjoying a "great partnership" with the FMA: any partnership requires contributions from both parties. The current headline-grabbing cowboy campaign of elevating the status of the FMA at the expense of the good financial advisers, doesn't seem like an equitable union to me.

On 14 July 2011 at 3:40 pm Trying to be compliant but who knows?? said:

Unfortunately, Mr H wants advisers to do more than the minimum where it is hard to determine exactly what is required or what will pass an audit when FMA will not answer questions and always direct you to your legal people, we should be given a clear indication of what the minimum expectation is for your needs analysis, statement of advice etc - I have sat and pass C and still unsure - I think I am right but won't be 100% sure till I pass the audit I guess and if I don't am I out??? The Disclosure regime of possibly 3 is confusing for the clients - I have been using it since 1 July whereas the old regime was not confusing and worked and quite why only AFA's have to disclose risk commission is beyond me it should be all or nothing - RFA and QFE members if selling risk should be under the same rules - it is misleading to clients otherwise.

On 14 July 2011 at 8:51 pm w k said:

@trying to be compliant but who knows? The trouble is, the regulators don't even know exactly what they want! Just ask them. The regulations are vague, and you are not the only one who was directed to legal people, and that's another set of costs. I can only say this, at least the cowboys know exactly what they want.
In my almost 30years in the financial industry, this is by far the WORST piece of regulation, and I cannot even think of the second worst.
What is a well written piece of regulation? One in which any average advisor is able to read and understand without a doubt. Whether they agree with it or not, that is immaterial.
Perhaps, it's about time someone ask whoever wrote the regulation to explain it, then we will all know how well they understand the business.