|        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Sunday, June 23rd, 2:52PM


Latest Headlines

Hughes apologises to investors

Financial Markets Authority chief executive Sean Hughes has apologised to investors left out of pocket by the past failings of the financial services sector.

Friday, August 16th 2013, 6:59AM 4 Comments

by Susan Edmunds

Hughes, who is preparing to leave his post with the regulator, spoke at the Workplace Savings NZ forum in Wellington.

He said the FMA's key goal was to restore investor trust and confidence in the sector, which had been eroded by a series of failures over recent decades that had left some people approaching retirement with very little savings left.

People were investing in property because it was perceived as safer, he said.

In the 119 weeks the FMA had been in existence, it had been a champion for change, he said. "With that came the desire to acknowledge the fact that New Zealand and New Zealanders have been poorly served... So to investors who have been left out of pocket, or been betrayed by the failings of market participants, I want to say I am sorry. You are entitled to feel let down and aggrieved... I will not walk away from the accountability that followed me into my role."

The FMA must accept responsibility for what happened on its watch or in parts of the market where it could or should have influence, he said.

But he said the regulator had to be forward-looking, and had taken the necessary steps to bring the guilty to account. "And we have been successful on every occasion."

It would continue to have a focus on willing, assisted compliance, he said. "Constantly waving sticks at people shows little respect. Dangling carrots is more effective."

The FMA was not keen on "tick box" regulation, he said, or regulation based on judgement.  "It should not be about 'is this sale legal' but 'is the outcome right for the customers'."

Hughes said the continuing delivery of the licensing regime for financial advisers was not without problems and it was not meant to be the "great wall of China".  But he said a mix of licensing, more professionalism and higher ethical standards would lift advisers out if a cloud of mistrust.

The Financial Markets Conduct Bill would mean another chance to modernise and lift standards. Hughes said the FMA was tired of whinging about regulation and market participants needed to adapt of leave the industry.  He said it was vital that work was done for the benefit of future generations.

New Zealand and Australia should strive to have integrated financial services markets, he said, with local rules as the exceptions rather than the norm.

« Showing value for advice number one issueIFA working on pro-bono offering »

Special Offers

Comments from our readers

On 16 August 2013 at 11:37 am Barry Milner said:
Anon, bravely hiding behind a veil of anonimity, should get his/her head out of his/her backside and acknowledge that in 119 weeks of existence the FMA can hardly be held responsible for the losses incurred by unfortunate investors over the last many years, losses caused either by bad advice, incompetent fund management or deliberate fraud. One of the worst recent examples is the Ross Asset Management mess, that was many years in the making and was certainly no fault of the FMA.

I am very disappointed that this forum will still publish unatributed opinions, if you don't have the guts to put your name to your contribution, keep it to yourself.

EDITOR's NOTE: The comment this post refers to was removed quite soon after it was posted as part of our moderation process. We removed it as it was inappropriate. Barry picks up on this point.
On 20 August 2013 at 11:08 am Bruce Tichbon said:
Excuse me Barry. The authorities were warned 3 years before the crash of RAM and they took no action. The FMA gave David Ross an Authorised Financial Adviser certification which he promoted to his clients, then current and future. The AFA certification was issued without the FMA doing any substantive checks on Ross. He made a fool of them.
On 20 August 2013 at 1:30 pm btw said:
Excuse me Bruce, but as a principal of a small financial services firm groaning under the cost of 3 different auditors (and we don’t even accept client funds), I have little sympathy for investors that ignore the regulated firms and opt to invest with unregulated entities. That is what RAM was and is – unregulated, and you accepted higher risk when you deposited funds with them. The merest of enquiries would have revealed that there was no auditor; no statutory trustee, and no independent custodian. The fact that Ross got away with this wasn’t because of regulator oversight – it was because he structured himself between the gaps, and investors permitted it by signing away their retail rights and/or not making due enquiry.

Your subsequent claims that he was AFA registered are quite irrelevant as well. Apart from the obvious (that he was only recently registered), the fact is that AFA status is only about financial advice – it’s not about custody of client funds. The two issues are quite distinct.

I started off having sympathy for you and your colleagues, but your continued lack of acceptance of fault suggests that you’re likely to repeat the same mistake in the future – which means another David Ross is going to happen as investors such as yourself will continue to steer towards the unregulated sectors - presumably to save a buck, or because that’s where the big promises are able to be made (free of regulatory constraint).

You would be better to devote your energy to improving the public’s education and understanding of the NZ financial licensing regime (or rather the lack thereof) – then at least investors might have an idea of the risk they take when dealing with unregulated bodies.

I am sorry if this offends – but the reality is that until the investing public start to take responsibility we are going to remain vulnerable to the David Ross’ of the world.
On 21 August 2013 at 9:47 am Ally said:
Bruce Tichbon is barking up the wrong tree re David Ross and his AFA status. The AFA delegated to the Code Committee the job of setting the tests that would determine who gained AFA status. And in its wisdom the Committee gave a free pass to Chartered Accountants in respect of the most searching of the tests. Ross must have thought his bacon had been saved when he saw this .....

Sign In to add your comment



Printable version  


Email to a friend
News Bites
Latest Comments
Subscribe Now

Weekly Wrap

Previous News
Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.99 ▼6.49 ▼6.29
ASB Bank 8.64 7.14 6.75 6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.74 7.35 6.99
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.65 7.25 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.74 7.09 6.95
SBS Bank Special - 7.14 6.49 6.35
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

Last updated: 20 June 2024 10:39am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox  |  Disclaimer
Site by Web Developer and