FMA monitoring not just for AFAs

• Tweet

All financial advisers should prepare themselves for a possible visit from the Financial Markets Authority in the near future, the Professional Advisers Association says.

Friday, August 24th 2012, 7:00AM 3 Comments

by Niko Kloeten

In its new publication Preparing for Financial Markets Authority Adviser Monitoring, the PAA says it's not just authorised financial advisers (AFAs) who should be getting ready for a knock on the door from the regulator.

"The FMA's current focus is to monitor authorised financial adviser (AFA) businesses. It would however be sensible for all categories of financial advisers to plan for a possible FMA review or visit over the next few years," it says.

As well as preparing for a visit from the FMA, registered financial advisers should also familiarise themselves with the Code of Professional Conduct for AFAs even though they are not bound by it, the PAA says.

"The FMA want you, as a professional adviser, to show them that you understand how to meet your obligations under current regulations, including section 33 of the financial advisers act (skill, care and diligence).

"AFAs must understand and meet their obligations under the Code of Professional Conduct.  RFAs should also understand the obligations in the Code and consider applying the code standards to their business."

The FMA uses a number of criteria for selection of businesses to review including targeted reviews based on information received, the publication says.

"If an adviser conducted practices which were not recommended, it might not be the FMA who notices: some members of the industry may be inclined to let the FMA know what their opposition may or may not be doing.

"The FMA has fielded and followed-up on complaints from both the industry and public."

PAA chief executive Edward Richards said the publication had been produced for members of the PAAas part of the organisation's Friendly Guide series but "we see it as a relevant and helpful publication for the financial services sector."

Niko Kloeten can be contacted at niko@goodreturns.co.nz

Comments from our readers

Sign In to add your comment