tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Saturday, December 21st, 2:19PM

News

rss
Latest Headlines

Problem found with AML

Advisers are worried that fund managers may pinch some of their clients if they have to pass over all their details under new anti-money laundering legislation.

Friday, July 26th 2013, 6:53AM 3 Comments

by Susan Edmunds


The FMA has acknowleged there is a problem with the law that took four years to implement and started this month, and it has released a consultation paper, called: “Practical implications of reporting entities transacting with other reporting entities.”

It tackles what the FMA has itself identified as a tricky issue – situations where one reporting entity, such as a fund manager, caters for a client who is primarily a client of another reporting entity – such as an adviser.



All reporting entities need to be able to identify the people on whose behalf a transaction is conducted, so that the individuals can be identified if necessary.

It has supplied a factsheet on managing intermediaries, which says a pragmatic approach is encouraged when investments are being made via an intermediary that is a reporting entity, such as in cases where wrap platforms are being used.  “This may involve one reporting entity relying on another reporting entity … but it does not mean that a reporting entity dealing with a managing intermediary can turn a blind eye to the source of funds.”

Anthony Edmonds, of Implement Investment Solutions said it was an unnecessary blurring of the lines regarding who owned the clients. “The responsibility for complying with AML legislation should sit with the group that owns the relationship with the client. If it doesn’t, it potentially blurs and confuses whose clients they are and who in the end is the investor’s provider.”

Murray Weatherston, of Financial Focus, agreed it would create confusion. “Advisers who use a platform or nominee companies do that to protect their relationship with clients. There’s a fear that not every fund manager would respect that. Once the fund manager knew the name and address of all the clients, they might try to sell them something else and take them away from the person who introduced them.”

Pathfinder’s John Berry said the ideal situation would have been for the FMA to recognise financial advisers as the “owners” of their clients and to have them as the one reporting entity for that client.

Pathfinder has signed advisers up to agency agreements. Agent advisers will then be monitored periodically to ensure that their AML processes meet the standards.

Berry said: “Under this agreement, the fund manager appoints the financial adviser as an agent to conduct customer due diligence. The financial adviser will then not be required to send verified ID documents for each client, unless specifically requested… we don’t see value in replicating what the adviser has done.”

The consultation paper asks whether there are any practical alternatives.  It says if any submissions are made that propose limits on the obligation to identify the “persons on whose behalf a transaction is conducted”, these will be passed on to the Ministry of Justice.

Submissions must be received by August 1.

« Little improvement in financial literacy: HughesIFA working on pro-bono offering »

Special Offers

Comments from our readers

On 26 July 2013 at 10:00 am btw said:
AML laws and general KYC obligations have been in this country since 1996 - and the industry is only now addressing these things! PS. Tell your client that you "own" them and see how that goes....
On 26 July 2013 at 7:38 pm Intrigued said:
I am interested in advisers sharing a few stories of where they have dealt with clients or situations that they think might be in breach of the AML rules. How common place is this stuff? Are clients wandering in with bags of cash? How much suspicious activity is there in NZ?
On 29 July 2013 at 11:43 am Barry Milner said:
What an industry! So advisers are worried that fund managers may "pinch" their clients if they are forced to reveal the clients' identities. If there is no trust between us it's small wonder the public find it hard to trust us. For heavens sake start behaving like mature professionals and one day we may be accepted as such.

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • The good guys get told off
    “I can't quite reconcile the rationale, or lack thereof, with the comments so far. Pathfinder were found to have made misleading...”
    1 day ago by John Milner
  • The good guys get told off
    “As a follow on to this conversation: I'm assuming that the Regulator will be consistent by 'naming and shaming' the other...”
    2 days ago by Pragmatic
  • The good guys get told off
    “FMA does not understand the consequences of these type of actions A number of Insurance Companies were taken to court and...”
    2 days ago by LNF
  • The good guys get told off
    “Superlife was censored for using unregistered salespeople however what is not commonly known was that the FMA were aware...”
    2 days ago by Patrickdiack
  • The good guys get told off
    “FMA executive director, Response and Enforcement, Louise Unger said:... Unger was appointed to that role in April of this...”
    3 days ago by Aggressively_passive
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 4.94 - - -
AIA - Go Home Loans 7.49 5.79 5.49 5.59
ANZ 7.39 6.39 6.19 6.19
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.79 5.59 5.59
ASB Bank 7.39 5.79 5.49 5.59
ASB Better Homes Top Up - - - 1.00
Avanti Finance 7.90 - - -
Basecorp Finance 8.35 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.54 - - -
BNZ - Rapid Repay 7.54 - - -
BNZ - Std 7.44 5.79 5.59 5.69
BNZ - TotalMoney 7.54 - - -
CFML 321 Loans ▼5.80 - - -
CFML Home Loans ▼6.25 - - -
CFML Prime Loans ▼7.85 - - -
CFML Standard Loans ▼8.80 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.69 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 6.95 5.79 5.59 5.69
Co-operative Bank - Standard 6.95 6.29 6.09 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 5.99 5.89 -
First Credit Union Standard 7.69 6.69 6.39 -
Heartland Bank - Online 6.99 5.49 5.39 5.45
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society ▼8.15 ▼6.50 ▼6.30 -
ICBC 7.49 5.79 5.59 5.59
Kainga Ora 7.39 5.79 5.59 5.69
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.25 6.69 6.49 6.49
Kiwibank - Offset 7.25 - - -
Kiwibank Special 7.25 5.79 5.59 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 7.94 5.75 5.99 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.49 6.95 6.29 6.29
SBS Bank Special - 5.89 5.49 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 4.94 4.89 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity ▼9.39 - - -
TSB Bank 8.19 6.49 6.39 6.39
TSB Special 7.39 5.69 5.59 5.59
Unity 7.64 5.79 5.55 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 7.70 5.95 5.75 -
Westpac 7.39 6.39 6.09 6.19
Westpac Choices Everyday 7.49 - - -
Westpac Offset 7.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 5.79 5.49 5.59
Median 7.49 5.79 5.69 5.69

Last updated: 18 December 2024 9:46am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
 
Site by Web Developer and eyelovedesign.com