In its BIM briefing, the FMA has laid out its scope of work, current priorities and planning cycle.
It said the financial advice reforms would mean significant change for the FMA.
“The new regime will significantly increase the number of financial advisers regulated by the FMA, with all advice subject to minimum standards that require monitoring.”
But work was already under way to prepare, the FMA said.
“Our preparation includes designing and introducing a new fit-for-purpose licensing process for financial advice providers, and developing a framework for ongoing monitoring. We will also invest in enhancing our technology to enable the new licensing process and manage the volumes, as well as with building a new interface with the Companies Office’s new Financial Service Provider Register platform.”
The cost of licensing would be recovered through license application fees but the FMA said it would also need more funding.
"We will work with MBIE on our funding requirements and provide you with advice, including an analysis of costs required that were not provided for in the FMA’s recent funding increase. That funding expressly excluded any provision to implement and/or operate the new financial advice regime, as the new policy settings and requirements had not been established at the time."
The FMA said its other focus points were investor capability, supporting innovation in financial markets, and a review of the financial sector assessment programme.
It would monitor KiwiSaver sales and advice conduct, fee transparency and reasonableness and default providers’ provision of information to enable active fund choices.
It said it also had concerns about misuse of the FSPR.
"We continue to receive complaints about entities registered on the FSPR falsely portraying themselves as being regulated in New Zealand when they are not," it said.
"We will continue to provide advice and feedback to MBIE on its regulatory reforms aimed at reducing misuse of the register."
The FMA said it was taking a risk-based, intelligence-led approach, applying a harm lens and a conduct lens to the issues it uncovered.
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