Disclosure is not a tick box exercise: FMA

The regulator wants to see advisers avoid burying disclosure in lengthy documents full of jargon and consider finding more creative ways of getting the information across.

“What we're seeing a little bit of in the pursuit of conservatism, so not wanting to get anything wrong, is a lot of papers went to clients in that initial meeting,” FMA Head of Financial Advice Romil Ghelani told workshop participants at the Financial Advice New Zealand Conference in Christchurch.

“Our message is you can find creative ways to disclose. And the goal there is to increase the chances that the clients will absorb that information and actually read it.”

While much of the financial advice regulatory regime is principles-based and flexible, says Gehlani, disclosure is one area where the rules around the information shared with clients and the timing, is prescriptive.