It says all the entities granted QFE status demonstrated capacity. However, in a number of cases application information was provided during 2010, before QFEs had fully implemented their compliance arrangements.
It says that information in QFE adviser business statements was sometimes unclear, lacked concrete examples or included detail that didn't relate to financial adviser services.
It says there are two key questions a QFE needs to answer: "What do you do?" and "How do you know it works?"
In its review the FMA looked at compliance assurance, supervision, suitability of advice and competence.
Supervision is the test to see whether advisers are doing what they should be and the FMA said it was an area of confusion, particularly about who is a supervisor.
The FMA said that it needed to follow up with QFEs to better understand how their supervisory processes worked.
While the summary report is written for QFEs the FMA says that it will be of interest to other financial adviser businesses in considering their compliance arrangements.
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