New Zealand financial advisers accounted for 26% of enforcement action taken by the Financial Markets Authority (FMA) in the last financial year.

This was the largest area of enforcement action by the FMA and covers contraventions of the financial adviser regulations.

The authority’s annual report says the emphasis for enforcement actions has switched from failed finance company proceedings to increased frequency of contact with authorised financial advisers (AFAs).

“Our monitoring program enables us to observe and record how AFAs are complying with their legal obligations,” the report says.

“It gives us the opportunity to provide them with feedback, so they can make any necessary improvements to their processes.”

An FMA-commissioned survey of 900 of New Zealand’s 2000 AFAs found “a good level of support and understanding of the Financial Adviser 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,” the report says.

The survey results will be used to develop specific guidance notes on key aspects of the financial adviser regime.

Meanwhile, the FMA has appointed UK regulatory expert Rob Everett as its new CEO. He replaces Sean Hughes.

Mr Everett was previously a director in the UK with Promontory Financial Group, a global regulatory consulting group.

Prior to this appointment, he spent 17 years at Bank of America Merrill Lynch in Europe, Asia and North America in various senior roles.