RFAs watch out, the FMA is coming
AFAs don't feature highly in the Financial Market Authority's strategic risk analysis, however, RFAs are prominent.
Friday, December 12th 2014, 6:47AM
The authority, yesterday, released its Strategic Risk Analysis which identifies parts of the markets which have the most potential to harm investors.
Chief executive Rob Everett says although AFAs are not identified specifically as a key risk area they are covered within the seven focus groups (see list below).
However, the FMA will be spending much more time on RFAs particularly around mis-selling of insurance and churn.
FMA director of compliance Elaine Campbell said the FMA now regulators 11,000 individuals and companies. Around half of this group are licenced. The main group which are not licenced are RFAs.
She says licencing is a powerful tool for the regulator as it gains a lot of information about the licencees and how they operate, and it gives the regulator enormous power and the ability to restrict a licencee.
While RFAs are not licenced and don't come under a monitoring programme like AFAs the will be subject to more scrutiny.
Everett acknowledges the status of RFAs may change after the review of the Financial Advisers Act, but "we are not going to wait until then."
"We are going to look at RFAs."
The FMA's Seven Key Areas of Focus
• Governance and culture.
• Conflicted conduct, such as remuneration arrangements that result in poor advice around financial products.
• Capital market growth and integrity.
• Sales and advisory services reflecting the best interests of investors and consumers.
• Investors having access to tools that help them make informed financial decisions.
• Ensuring frontline regulators, such as exchange operator NZX, are effective.
• The FMA maximising its own effectiveness and efficiency as a regulator.
| « FMA: We don't expect many personalised DIMS authorisations | QFEs call for simplification » |
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