First clues about the impact of the new rules of conduct on advisors

Much-awaited guidance has been released by the Financial Markets Authority on how the new rules of conduct will work with advisors.

Tuesday, February 21, 2023 at 12:53 PM

We released consultation book about “brokerage circulation”.

This paper is of particular importance to lenders working with mortgage advisors, insurers, and risk advisors.

In this paper, the regulator outlines its expectations and communicates what it does not expect from the sector.

This suggests that some firms have overseen their advisors.

The FMA said that the Financial Markets (Conduct of Institutions) Act (CoFI) and the new financial advice regime “complement broad and coherent overarching policy objectives, both of which seek to protect consumer interests related to the distribution of goods and services. I admit that we need to consider

“The intention of the policy is to share responsibility for fair treatment and outcomes of consumers between financial institutions and FAP-licensed intermediaries through a two-tier system.”

We also recognize that “the flexibility offered by principles-based regimes such as CoFI can create uncertainty.”

That guidance is intended to give financial institutions confidence that they can design fair conduct programs in a proportionate manner that meets CoFI distribution requirements without unintended or unnecessary impact.

“The guidance is non-prescriptive. We want financial institutions to have the flexibility to design their own approaches.”

In a consultation paper, the FMA outlined its general expectations and the overall purpose of the guidance is to ensure that intermediary arrangements are designed to promote fair outcomes for consumers. said.

“These arrangements should clearly assign roles and responsibilities and include processes to monitor their effectiveness,” said Claire Bollingford, executive director of the FMA and implementing regulations. increase.

In a statement, the FMA said advisors must comply with the FAP regime and the Financial Market Conduct Act 2013.

The CoFI requirements complement these needs by “having broad and coherent overarching policy objectives.

“The intention of the policy is to share responsibility for fair treatment and outcomes of consumers between financial institutions and FAP-licensed intermediaries through a dual system.”

tag: CoFI

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