Financial advisers pose lesser distribution risk says FMA

The Financial Markets Conduct (Conduct of Institutions) Amendment Act (CoFI) will impose a new conduct-licensing regime on banks, insurers and other non-bank financial institutions from the end of March 2025 with transitional provisions starting in July.

The FMA says intermediaries which provide financial advice are already subject to their own set of conduct duties under the CoFI regime under Part 6 of the FMC Act and the Code of Professional Conduct.

“Ultimately our view is that the CoFI and financial advice regimes are complementary, with broadly consistent overarching policy objectives. The policy intention is that the dual regimes create a shared responsibility between financial institutions and FAP-licensed intermediaries for fair treatment and outcomes for consumers.”

The FMA says institutions should take into account in determining what policies, processes, systems and controls are effective for the purposes of their fair conduct programmes. Both CoFI and the financial advice regime require consumer interests to be considered in relation to the distribution of products and services.