FMA 'too slow'
The Financial Markets Authority needs more resources to proactively engage with the industry, rather than reacting to problems and complaints when they are raised, says former FMA senior adviser Gavin Austin.
Friday, May 10th 2013, 6:00AM 
1 Comment
by Susan Edmunds
He has left the FMA after three years, to set up his own business, Adviser Business Compliance (ABC), helping adviser clients navigate regulation.
He said he had become too deskbound at the FMA. When he started, he had anticipated spending up to 75% of his time working with advisers but that had not happened. “I felt I was spending too much time in the office instead of getting out there and influence in the marketplace.”
Austin said the FMA would like to do more but it was a matter of resources. When complaints came through, they had to be followed up at the expense of other work. “There’s difficulty in balancing a proactive approach with a reactive one.”
Ross Asset Management’s failure had highlighted issues and stirred up more activity, but the FMA was still not on the front foot, he said.
Austin said the FMA was working through a big learning process but had not been as agile as it should be.
Some of the advisers who were visited in the first round of monitoring, which Austin was involved with two years ago, are only now going to a disciplinary committee hearing. “Things have moved far too slowly.”
Austin said the FMA was now moving out of its “hand-holding” stage and would expect advisers to know what they should be doing, especially around the new anti-money laundering legislation, which comes into effect next month.
“If someone comes around and says ‘I want to see an AML risk assessment and plan’, it has to be there. If it takes a couple of weeks to produce it, that might have been overlooked in the past but not this time.”
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That's why they missed David Ross (most Wellington advisors would have brought his name up if the right questions had been asked: but all they were interested in was "have you dotted all i's and crossed all t's on your Disclosure statement).
Also disappointing was Sean Hughes's bureaucratic response to being caught flat-footed by RAM: "We need more regulation". The FMA had enough tools: they just didn't use them.