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FMA pursues non-filers

FMA is chasing up errant authorised financial advisers who have not filed their information returns.

Wednesday, April 29th 2015, 6:00AM 4 Comments

by Susan Edmunds

Kirsty Campbell Head of Supervision at FMA

AFAs must submit an information return annually, under the new regulatory reporting rules.

The first were due last year and the FMA last week said 1784 of 1901 AFAs had completed them.

FMA’s head of supervision Kirsty Campbell said the FMA had followed up with those who had not filed. “Some people didn’t understand what it was, some moved and some were offshore.

She said there were two AFAs left who were yet to file a return.  “There are a last few cases where action will be taken ASAP. Everyone else is doing it so it’s important to follow up.”

She said it would not be fair to those who completed the returns if the FMA did not pursue those that were still to be filed.

Filing is mandatory and the FMA said enforcement action would be considered in cases of ongoing non-compliance.

Campbell said: "As a last resort there is the potential for a fine but we would issue a formal warning prior to that- which would be a published warning."

Under the Financial Advisers Act, failing to comply with the terms and conditions of authorisation can result in a maximum penalty of $5000.

The survey showed about 11% of the advisers authorised to offer financial advice were not doing so.

Campbell said the questions that would be asked in this year’s information return would likely be similar as last year's, to reduce the burden it placed on advisers.

The 40 questions covered things such as the size of an adviser’s business, the number of clients they dealt with and how they were remunerated, as well as the length of time they had been operating in the industry.

Campbell said the FMA wanted to thank the advisers who had filled out the return.

Tags: FMA regulation

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Comments from our readers

On 29 April 2015 at 8:43 am NormanStacey said:
Shouldn't the headline be, "99.9% of AFA's compliant with their filing? FMA chases the remaining 0.1% - 2 out of 1901.
On 29 April 2015 at 12:21 pm Murray Weatherston said:
Norm, you need to read this story in the context of a story last week that said 1784 of 1901 had filed the mandatory AFA Information return. I commented on that story that it left open the question as to what had happened with the 117 who didn't meet the deadline. FMA has now filled in that information gap i.e. they have chased them all up and now there are only 2 outstanding. FMA deserves a bouquet for providing this additional info.
Does anyone else share my view that FMA has been pretty generous to date giving those 2 what is now almost another 7 months to comply since due date 30 September 2014.
On 29 April 2015 at 7:28 pm gavin austin adviser business compliance said:
Well said Murray. We don't know of course how many advisers took this long to get their act together. It may have only taken a follow up reminder with the FMA indicating what the penalties could be if they didn't comply.

However the standard conditions for AFAs have been out there for quite some time. The problem is that it's taken FMA all this time to get the regulations in place to activate them ( I can recall one of the staff members starting on this as far back as about this time 2011).

If AFAs don't get the returns in on time this year I'd hope that instant infringement notices are issued for a minimum of $1000 a pop ( I'm sure the FMC Act allows for FMA to issue infringement notices ,just not sure if they can for this offence).

There are advisers out there that have had their heads buried in the sand too long hoping compliance will pass them by.

Meantime all the professional advisers get on with doing the right thing. As some commentators have been banging on about lately the FMA has demonstrated in a number of ways that they don't really understand the smaller independent adviser business model and regulatory reporting was always and will continue to be a way for them to get some idea of the make up of our industry.

If only they could figure out the right questions to ask. By this time 2016 the vexatious questions about DIMs will all but disappear as there will be so few offering it they'll be able to send them their own personalised questionnaire to complete.
On 1 May 2015 at 10:05 am NoNoCents said:
I have no sympathy for AFAs who don't comply, fine, public censure and revocation of AFA status I say. And lets add a public flogging.

Only acceptable excuses - dead or lambing. On second thoughts no not even lambing, plan around it.

Enough namby pambying around looking after the ignorant, the arrogant and the incompetent. Is AFA a PROFESSIONAL designation that can help instil confidence in the industry or a waste of time and money? Whew, glad I got that off my chest!

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