FMA begins offering advisers post-monitoring feedback

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The Financial Markets Authority (FMA) has been providing feedback to around 45 authorised financial advisers (AFAs) in the wake of its first round of monitoring visits.

Tuesday, November 8th 2011, 7:03AM 2 Comments

by Benn Bathgate

Goldridge Wealth Management adviser Bernard Long was among the first advisers to be put through the monitoring checks, which he described to Good Returns.

"The whole process, right from the word go, was very professional. They were very clear in what they were going to do, what their requirements were, timing, who would do it and it was all quite slick."

He said the FMA first contacted him by letter outlining the process and asking him to respond, saying they wanted a list of all the clients and prospects he'd give advice to since becoming an AFA.

He said they then told him what they'd be looking at, and requested the relevant files and his adviser business statement (ABS).

"My experience was that it's broken into two parts, the first part is the review of the ABS, they're looking for you to validate what you're saying in there, to show them the research and show them the things that are referred to, two people do that," he said.

"Then the next day they did the file analysis and they didn't bother me too much there because I gave them everything they needed."

He said the watchdog appeared to be interested in the linkage between recommendations made and the objectives of the client.

Another adviser to undergo the monitoring - who wished to remain anonymous - told Good Returns they felt the process was handled well, but that the timeframes were tight and would prove problematic for a less well organised adviser.

"They're not going to let you know until the last minute which files they're going to look at, so you've got to run your business correctly every single time with every single client, otherwise you're going to come unstuck.

"You can't quickly race around and fix it if you haven't done the right things."

The FMA said advisers had engaged positively with the monitoring, with most advisers receiving feedback about improvements in one or more area.

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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