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Scrub up or ship out

FMA chief executive Rob Everett says don't knock on my door to find out what good conduct is.

Friday, September 13th 2019, 4:03PM 3 Comments

A recurring theme at the Financial Services Council conference was that companies need to "scrub" their products and services.

Financial Markets Authority chief executive Rob Everett told delegates that the industry was at a crossroads.

"Public trust in financial services as a whole is at historic lows across the world. Here in New Zealand, the situation has generally been better but more recently public trust has been shaken."

He said reviews of the banking and life insurance sectors found "significant weaknesses" in the way institutions govern and manage conduct risks. He said changes needed to be made.

The regulators had put pressure on the banks to ditch internal sales incentives which were based on volume targets amid concerns they were driving poor outcomes for consumers.

When it comes to life insurance companies, Everett said: "I think it is fair to say we were not impressed."

"I know we now have the attention of the boards and management within that sector. Unfortunately, their previous lack of focus and resource on conduct and how to build organisations that serve the customers told us we should recommend to the Government that legislative intervention was required."

Everett said while its reviews did not find a widespread breach of the law or misconduct across the banking and life insurance sectors it had found processes and practices that were sloppy and were not adequately designed to look after customers.

"We saw insufficient focus on the risks posed to customers of poor behaviour whether by deliberate conduct or sloppiness."

"Good conduct is up to you – the industry – providers and advisers. Given what we've seen in other countries, I have to ask why you are waiting for us to come knocking – look at what we are saying, and think about how it applies to your business."

Tags: FMA FSC Good Customer Outcomes Rob Everett

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Comments from our readers

On 14 September 2019 at 11:23 am Winka said:
What a very rude and arrogant statement from the head of a group who were put in place at government level to assist and oversee financial service providers.?

The regulation thrust upon the financial services industry is not unlike the regulation thrust on other sectors such as the building industry.

The huge cost to apply these regulations far outweigh the benefits.

Regulation may be needed and can be a good thing, however, it has now become over the top, and when we see heads of these departments acting with such rude and arrogant remarks which achieve no advanced good, it leaves most of us disillusioned with their so called authority.

Just consider for one, the "regulation" applied right up to the recent GFC, a "prospectus."

What did it achieve in protecting clients from the number of companies who went belly up...with the clients money?

It achieved one clear thing for a start.......the obvious protection for all those "Trustees" of who none of them went to court, yet they were supposed to oversee all that happened within the relevant company businesses that went belly up?

Now, we are being conditioned with the regulation thrust upon the building industry.
In recent years, we have seen new scaffold and white plastic wrapped buildings in the name of mostly wasted and ineffective regulation and many people have been "conditioned" into perceiving all of this as a booming economy??

eg: Who needs a costly illuminated sign to tell you where the front door is on a relatively small building, when the front door has never been more than a few short metres from anyone??

What will the outcome be when all the "regulation" is finished soon?
Maybe the opposite..a failing economy?

Who is it that can hold a 'person' such as CE Rob Everett to task for such an unhelpful remark as he made in what is clearly a lame attempt at helpful control?

May I suggest that "knocking on his door" for any helpful suggestions would be one of the last doors to knock on, because he simply appears to want to "pass the monkey" on such expected help or assistance.

Or...are most of these new government departments merely a creation of new jobs for people who can only offer "put-downs" of real workers as their solutions??

On 16 September 2019 at 8:09 am MPT Heretic said:
So the FMA reviews the sector and finds no evidence of misconduct or breach of regulations. But apparently the CEO and his Exec can then apply some alternative view of 'insufficient focus' and put the boot in publicly.

All the while promoting some abstruse idea of 'good conduct' that no one is allowed to define least it become obvious that it can mean completely different things to different people in different circumstances. Sigh.
On 17 September 2019 at 7:16 am Skeptical said:
Just a thought, perhaps the low customer customer confidence could be due to the Chief Exec of the FMA constantly telling the public how we're a bunch of crooks.

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