The FMA published its first monitoring report on practices in sales and advice within NZ’s financial services sector.
The report covers sales and advice practices for RFA’s AFA’s and QFE advisers.
The report shows the FMA has found inconsistency in the quality and maturity of systems, and the practices in use across the industry. The main issues highlighted in the report are:
- Lack of comprehensive governance systems – which allow firms to establish the right culture in sales and advice practices from the top of an organisation. Insufficient reporting to senior management on sales and advice outcomes, and inconsistent attention to managing conflicts of interest in sales and advice practices
- Inadequate attention to ensuring that consumers have access to appropriate information and advice, relative to their specific needs and the types of products on offer
- Lack of comprehensive compliance systems that can provide firms with reassurance that they are addressing all of their regulatory and conduct risks in sales and advice
The report findings, Russell says, are ‘eerily familiar’ to people that have had to work as an expert witness. Readers interested in building cost-effective but suitable advice review processes should talk to us.