What do we mean by conduct?
Conduct is how market participants behave and how they serve the needs of customers.
It is about how a business operates as a whole, and it’s driven by the culture and the governance of the organisation.
What conduct do we expect?
We expect financial service providers to conduct themselves in a way that serves the needs of customers. This means a focus on:
- treating customers fairly in all interactions
- recognising and prioritising customer interests and effectively managing conflicts of interest that arise
- giving customers clear, concise and effective information
- designing and distributing products that are suitable, work as expected and as represented, and are targeted at appropriate customers
- ensuring adequate after-sales care, including complaints and claims handling, and not imposing unnecessary barriers to switching or exiting product or services
- effectively monitoring your own conduct, and where relevant, the conduct of suppliers and distributors, to ensure mistakes can be identified, rectified and learnt from.
We expect boards and senior managers to look at this list and then ask themselves whether they are doing these things.
We also expect them to be proactive in identifying instances where they may not be properly serving the needs of customers.
This guide to the FMA’s view of conduct gives more detail on what we expect.
How do we assess conduct?
We assess the conduct of market participants in a number of ways, including:
- Running monitoring reviews to assess how they are complying with obligations and demonstrating they are serving the needs of customers
- Undertaking ‘thematic reviews’ of the sector to understand how different firms conduct themselves on a particular topic of interest
- Acting on information (such as complaints) from customers and market participants themselves
We also get information from consumers to understand their perspectives on the conduct of market participants.
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