Consumers Tell FMA about Financial Providers’ Conduct
Consumers tell FMA about financial providers’ conduct
Financial services providers are fair and professional, but have work to do to explain fees and how their products are appropriate, their customers have told the FMA.
The FMA has completed its first survey of consumers’ experience of conduct. It follows the publication of the FMA’s guide to its view of conduct earlier this year. This focused on the ‘five Cs for good conduct’: capability, conflict, culture, controls and communication.
The guide sets out the FMA’s expectations of what good conduct looks like for financial services providers. It goes hand in hand with an FMA investor guide that outlines how customers should expect their provider to behave.
The questions asked in the consumer survey reflect the factors in these guides.
“The changes that have been introduced through the FMA licensing of financial service providers put good conduct at the heart of the industry’s priorities. We have already raised industry and consumer awareness of our view of what good conduct looks like,” said Paul Gregory, FMA Director of External Communications and Investor Capability.
“We thought it was also important to hear from consumers directly about what’s actually happening, through our survey. As our guide makes clear, conduct is about what consumers are experiencing.”
“This survey is not a one-off, this will become an annual survey. We’ll share with providers what their customers are telling us about them and, where there are issues, we’ll expect to see them do better,” Mr Gregory said.
Overall more than two thirds of customers said their provider was knowledgeable and the information they provided was easy to understand.
For questions around fairness and professionalism the providers also scored well. However, only half of investors agreed their provider had explained the fees. Just 52% of respondents agreed their provider had helped them to understand why the product was appropriate for them.
One in five investors disagreed with the statement their provider “explained the fees.” These scores were even lower when focusing exclusively on KiwiSaver providers. Among KiwiSaver customers only 46% agreed that fees had been properly explained, and one in four disagreed with that statement.
The survey can be found here