Brown: Advisers struggling with principles-based approach
Financial advisers are struggling with the “principles-based” approach to regulation, says the FMA’s Sue Brown.Brown is now the head of innovation, strategy and engagement but had previously been tasked with overseeing advisers.
She said all advisers were expected to be governed by the principle of “client first”. But some struggled when that was not laid out in clear rules or processes that they should follow.
She told the 9th annual securities law conference in Wellington yesterday: “They say ‘where are the rules, how do we know we’re doing that?”
Brown said advisers needed to act as professionals and put their clients first by giving them the best products for their needs, not the products that offered the best commissions. Ross Asset Management and the collapse of finance companies had taken a toll on investor confidence, she said, and if that was to be rebuilt people would need to see the market putting their customers first.
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