We select AFAs for monitoring reviews in one or more of the following ways:
Monitoring activities include a mix of desk-based research (investigating complaints, checking websites, and reviewing documents, eg. Adviser Business Statements, professional development plans), phone discussions and office visits. We may also use mystery shopping.
FMA's current monitoring and surveillance activities for AFAs include:
Our expectations in these areas are covered in the AFA ABS Guide and in the AFA monitoring feedback and tips outlined below. FMA's AFA monitoring reports on how AFAs are complying with their legal obligations can be found here.
If you receive a request to submit your ABS, you will be expected to submit this promptly.
You will receive a fact sheet explaining how the review will work and the likely outcomes. These may include:
In most cases, we will contact you to find a convenient time to visit. The monitoring review is about your compliance - so other members of your team cannot substitute.
You will receive a fact sheet explaining how the visit will work and what we will need you to prepare. You will usually be asked to supply your ABS in advance of the visit.
During a visit, we will review your compliance with your obligations, and check you are operating in accordance with your ABS. We will also consider whether the advice or service provided was suitable.
In accordance with Standard Condition 4, you need to have available all business records pertaining to your financial adviser business so that we can complete this review. This may include your client files, your systems and procedures, your disclosure statements and your competence records.
To facilitate this you should explain to clients they are subject to regulation including monitoring by FMA, and obtain their clients' authorisation to the release of their personal information to us.
Where AFAs have not yet obtained client authorisation, and cannot meet their obligations under Standard Condition 4, FMA may decide to use its powers under section 25 of the Financial Markets Authority Act 2011 to require an adviser to supply FMA with information, documents or evidence. In this case, section 7 of the Privacy Act applies so that clients' consent to the release of their personal information is not required.
Any client information held by FMA will be held securely.
Inspection of records is a standard function of any regulatory body and gives the public more certainty professional standards are being upheld.
Once the visit is over, we will let you know the outcome of the review and whether any further information or work is required.
AFAs should consider the following:
See 'what we look for in our monitoring' page for more details
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