Regulatory burden acknowledged
19 May 2017
The Financial Markets Authority says it is concerned with how the burden of regulation is being felt by the financial services industry.
In an update, director of external communications and investor capability Paul Gregory said conduct regulation was a balancing act.
He said, on one side, the regulator had to consider the impact on the industry, including the cost of regulatory requirements.
On the other, it had to balance that against the benefit to the industry and the country as a whole of a well-regulated financial services sector.
“The ‘burden’ of regulation is an ongoing concern and certainly a conversation topic for the industry. Some burden is inherent within the regulation we’re required to implement. And some comes from how we choose to do our job. As the regulator we must be aware of both, but we focus on what we can control,” he said.
“There is also a difference between imposing unnecessary burden, and doing something which is simply unpopular. Risk is what separates them. Provided we are addressing a genuine risk of harm, we shouldn’t be overly concerned if those activities are not universally applauded. Changing our plans based on lack of popularity would make even less sense.”
Gregory said the FMA was working with others in the industry to be more efficient, and providing relief with exemptions where it was appropriate.
The FMA also offered tips for advisers to get the most out of their professional development plans, which guide the CPD hours they are required to complete.
It said, when writing the plans, advisers should personalise them and think strategically about the performance their businesses had offered over the past year, where they were confident and what they could do that might add value for their clients.
They should review the plan regularly, keep it simple - to just a few pages - and relevant. They should also identify any gaps in their competence, knowledge and skill and take action if they were relying on an old competence pathway that was no longer available.
They could do that by noting any training they needed to come up to the Code Standard 16 minimum level, the FMA said. "To do this, simply compare the learning outcomes for each of the relevant Unit Standards of the Components of the New Zealand Certificate in Financial Services (Level 5) with your current competency, knowledge and skills."
It said advisers should also take care not to offer any services that they did not have the capability to provide.
- Good Returns