FMA paying more visits to AFAs

The FMA has increased its contact frequency with AFAs over 12 months ended June, and introduced a new, shorter “verification visit”.

“Our monitoring programme enables us to observe and record how AFAs are complying with their legal obligations and gives us the opportunity to provide them with feedback, so they can make any necessary improvements to their processes.”

It had focused on DIMS providers and commissioned a survey of AFAs, to which 900 responded.

“We found there is a good level of support and understanding of the FA Act and the Code of Professional Conduct for AFAs. Some advisers expressed concern that the new compliance obligations, such as the record-keeping elements of the Code, is adding to the costs of providing advice and is not always helpful for clients. We also heard that the legislation is complex, more guidance from FMA would be helpful, and that advisers were concerned about ordinary New Zealanders having sufficient access to financial advice…We share industry’s concerns in relation to access to advice and will continue to look for practical ways to address this.”