Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Financial Markets Conduct Act takes effect

1 May 2014

Cultural shift in financial services underway as once-in-a-generation Financial Markets Conduct Act takes effect

The Chief Executive of the Financial Markets Authority, Rob Everett, says a long-term cultural shift – for the better – is underway in New Zealand financial services as the new Financial Markets Conduct Act 2013 takes effect.

Mr Everett was speaking in Wellington, New Zealand, today to parliamentary and industry Ombudsmen, from Australia and New Zealand, at their biennial conference.

There are positive signs that public confidence in New Zealand’s financial markets is improving, said Mr Everett. “However, service providers and regulators need to work harder to improve consumers’ understanding of how complaints are heard and resolved by industry ombudsmen or alternative dispute resolution schemes.

“Consumers need to know what they are entitled to and what recourse they have through dispute resolution schemes, if they feel things have gone wrong.”

Culture change in behaviour
Mr Everett said the FMA was anticipating a shift in the way providers conducted themselves.

“The Financial Markets Conduct Act brings in a new fair dealing provision – a catch-all provision that applies across all financial services – that prohibits misleading or deceptive conduct, and false or misleading representations.

“I anticipate over the next five years this will promote a major cultural shift in financial services. These fair dealing provisions will transform the conduct of professionals. We’re saying to the industry, ‘The bottom line is, this act requires you to put the concerns of the consumer first. Always.’

“That doesn’t just require truthfulness. We’d expect that as a minimum requirement. The act requires financial services professionals to go much further, and ask themselves questions like:

‘Is this really the right product or service for this client?’

‘Does this client really understand the downside risk and what that might mean to them in a material sense if that risk comes to book?’

‘Should I be advising this client on other actions they can take, such as risk mitigation?’

“In future, in New Zealand, you’ll have to be able to answer a resounding ‘yes’ to those questions – and others - in order to make the cultural shift we anticipate,” said Mr Everett.

Improving providers’ and consumers’ understanding of Alternative Dispute Resolution Schemes (ADRs)
Alternative Dispute Resolution schemes can help resolve customer complaints, particularly where modest sums are involved. Membership of ADRs has been mandatory in New Zealand since 2010, but many financial services providers doubt the value of the schemes.

According to a survey by the Ministry of Business, Innovation and Employment, 60 per cent of financial services providers were unsure of the value that ADR membership brings.

“More than half of those surveyed were unsure whether ADR schemes produced fair outcomes for complainants or for providers – these numbers are too high,” said Mr Everett.

“We have to build confidence in the ADR schemes among providers so that consumers can enjoy their benefits.”

Co-operation between regulators and ADRs
Mr Everett told the conference that regulators and ADRs – such as Ombudsmen - would work closely together, especially to identify less obvious instances of consumer harm that can be resolved without the need to take enforcement action.

Full speech notes are on the FMA website: www.fma.govt.nz

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Convention Centre: Major New SkyCity Hotel And Laneway For Auckland

Today SKYCITY Entertainment Group Limited revealed plans to build a new hotel and pedestrian laneway of bars, restaurants and boutique shopping on land it owns in the Nelson and Hobson Streets block, expanding the SKYCITY Entertainment Precinct. More>>

ALSO:

Igniting The Spark: Bringing The Digital Enabler To Life

Changing a name is, relatively speaking, the easy part of a re-invention. Changing a culture, getting all the ducks in a row, turning yourself inside-out to become customer-inspired is a much bigger challenge. More>>

ALSO:

Ebola And NZ: Targeted Screening At Airport But Risk Low

The risk of any cases of Ebola in New Zealand remains very low, but health and border authorities are well prepared... anyone arriving in New Zealand who in the last three weeks has visited countries affected will be screened for symptoms of the disease. More>>

ALSO:

Scoop Business: Brewer Seeking Crowd-Funding Cancels Shareholders’ Dividends

Shareholders in Renaissance Brewing company, the first business to seek equity through crowd-funding in New Zealand, have cancelled their claim on $147,000 of accumulated earnings “to make Renaissance a more attractive investment opportunity.” More>>

ALSO:

It's Spark Now:
Why Telecom Wanted To Change

New Zealand led the world when Chorus demerged from Telecom. It gave us a telecommunications industry structure where the network is completely separated from the products and services it delivers. The changes brought about a new market dynamic and it dramatically changed Telecom’s role. More>>

ALSO:

Glass Half Empty: Dairy Prices Fall To Lowest Since 2012

Dairy product prices slumped to the lowest level since October 2012 in the latest GlobalDairyTrade auction, paced by whole milk powder and cheddar. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news