Media release
MR No. 2017 – 06
28 February 2017
The Financial Markets Authority (FMA) has today published a series of pointers for customers to use when they are dealing with financial services providers.
These providers include KiwiSaver providers, superannuation schemes, fund managers, financial advisers, auditors, discretionary investment managers, derivatives issuers, peer-to-peer lenders and equity crowd-funding platforms.
The FMA is both guard dog and guide dog for New Zealand’s financial markets, said Paul Gregory, FMA Director of External Communications and Investor Capability. “We have published these investor entitlements to help customers deal more confidently with their providers and be able to make more informed decisions about their investments.”
Since December 2016, a shift in how financial services are regulated in New Zealand means investors have more protections. The FMA has the power to license, supervise and monitor providers’ conduct. The regulator also has stronger powers to intervene where it has concerns about misconduct or potential harm, and can take action against misleading or deceptive conduct through fair dealing provisions in the law.
Financial jargon and the complex, technical nature of some products means customers can be discouraged from talking directly with providers. The FMA wants to address this imbalance of information between those who make and sell financial products and those who use them.
When dealing with a licensed provider the FMA believes you are entitled to:
- Competence
- Be treated honestly and fairly
- Be informed
- Know how much you are paying
- Have problems and complaints dealt with properly.
Customers should expect to be told about any conflicts of interest or commissions received through the sale of a product. Fees should be clearly set out, and providers should be willing and able to explain why they are reasonable.
If there are limits to what the provider can offer the customer, this should be made clear.
Mr Gregory said, “We can see or be told about bad conduct by providers and do something about it. But prevention is much better, where customers considering a financial product know what they should be told, know to ask good questions, and then choose with confidence or walk away and avoid a bad result. And of course they should be told what they’ll be paying, including any commissions, and we strongly encourage them to test their provider on why they think their fees are reasonable.”
Details of what customers should expect from their providers can be found here in the FMA’s Investor Entitlements.
To bring these 5 key entitlements to life and prompt people to ask questions the FMA has produced an animated version here.
Contact:
Andrew Park
Ph: 021 220 6770
[email protected]
