FMA offers more insight into adviser misconduct trends

Romil Ghelani, head of financial advice at the FMA, said that there have been enough concerning reports to signal this as a priority over the next 12 months, particularly in mortgage and insurance advice.

Some of the issues coming through include allegations of fraudulent loan and insurance applications, and products being sold “in a pressurised way to clients in vulnerable circumstances” that don’t meet their needs. Ghelani said there have also been reports of “misleading and deceptive practices in general”, where it’s clear that the adviser prioritised selling the product over the client’s best interests.

This is the kind of conduct that the new financial advice regime aimed to stamp out. Ghelani said that while there hasn’t been a “massive” uptick in cases, there has been enough to warrant attention.

“We’re seeing enough of these cases coming through and progressing to our response and enforcement function that we want to signal this as a priority for the next 12 months,” Ghelani told advisers in a recent FMA webinar.