Mortgage advisers need to check their licensing
The Financial Markets Authority has released its annual corporate plan 2022/23 by signalling a period of change for both the financial services industry and the regulator itself.
The plan sets out the FMA’s key priorities and intended work program for the current financial year and will involve the FMA delivering on three key areas.
These include:
- Maintaining a steady and consistent focus on building conduct maturity in the sectors the FMA already licenses and oversees
- Delivery of core functions related to licensing, monitoring and responding to egregious misconduct – particularly in relation to consumer harm and building capability to implement new legislation
- Taking on increased responsibilities under its expanding mandate as a conduct regulator
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FMA chief executive Samantha Barrass (pictured above) said the plan’s relevant sector updates for mortgage advisers included retail advice and access on page 9 and FAP (financial advice provider) on page 11.
Retail advice and access
“The sector is undergoing a period of change with the new financial advice regime that came into effect in March 2021,” the annual plan stated. “Those operating under a transitional licence must move to a full licence by March 2023 to continue providing regulated financial advice to retail customers. We continue to work with the sector to support this transition with user friendly tools and guides, together with a dedicated licensing team.”
FAPs regulatory returns
“We will consult on a new set of regulatory return questions designed to inform and guide our future monitoring,” the plan reported.
Barrass said the FMA had introduced new legislative regimes including the financial advice regime (FSLAA). Full licensing, which will take effect from March 2023, meant those operating under a transitional licence must move to a full licence by March 2023 to continue providing regulated financial advice to retail customers.
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“The FMA has built a solid track record for implementing new legislative requirements for financial services. Conduct regulation is no longer a novel or foreign concept for firms. With the introduction of FMA licensing for banks, insurers and non-bank deposit takers, conduct obligations will be firmly at the heart of a fair financial system,” Barrass said.
“As our remit grows, the FMA will have a greater focus on fair outcomes for consumers and investors. The financial sector is an enabler in people’s lives and it’s important it works well for all. In turn, this will shape how the FMA operates and organises itself as we step up and deepen our understanding of consumers and how they interact with financial markets and services.”
Barrass said to ensure that the FMA delivered value for New Zealanders, it needed to evolve how it undertakes its work as it grows into a significantly larger organisation and adapts its regulatory approach.
“We will need to elevate our capabilities – introducing new skills in data science, behavioural insights and economics. This is an opportunity to refresh how we define and deliver our approach based on the outcomes we want to achieve and to measure our effectiveness and efficiency in fostering a strong and trusted financial sector that treats people fairly,” she said.
“I’m looking forward to bringing our priorities to life over the next year including introducing a new conduct framework and remaining an open, accessible and engaged regulator working with industry to implement these changes.”
