Have your say on finance advice

The Financial Markets Authority (FMA) is seeking public feedback about proposed guidance for the intermediated distribution of products, including car dealers selling vehicle finance or insurance.

The consultation is being undertaken ahead of the implementation of a new conduct of financial institutions (COFI) regime designed to ensure consumers are treated fairly, and to establish, implement and maintain a “fair conduct programme”.

Such programmes must account for arrangements where an intermediary or agent is involved in the distribution of a financial institution’s products or services, such as insurance or mortgages.

The FMA’s consultation paper outlines its general expectations for such arrangements, which can be applied across different sectors and distribution models.

Clare Bolingford, FMA’s executive director regulatory delivery, says: “Our approach throughout the implementation of COFI and the new advice regime has been to consult and collaborate with industry. 

“The draft guidance is the result of a series of workshops with financial institutions and intermediaries. 

“The overall purpose of the guidance is to ensure intermediary arrangements are designed to promote fair outcomes for consumers. These arrangements need to clearly assign roles and responsibilities, and include processes for monitoring their effectiveness."

Bolingford adds the proposed guidance is non-prescriptive and designed to allow institutions flexibility to design their own approach to aligning with the fair conduct principle.

She notes that once COFI is embedded across the industry, the FMA’s monitoring will focus on whether entities are delivering fair outcomes for consumers. 

“Therefore, we encourage financial institutions to work with their intermediaries now, to ensure their fair conduct programme is more than just a checklist for compliance.”

Feedback on the proposed guidance closes on April 14. To view the consultation paper, click here.