The work of the FMA is only half done says its outgoing CEO Rob Everett.
Everett, who is leaving the regulator to head up New Zealand Capital Growth Partners, spoke during an FSC webinar where he remembered his first weeks in the role having just arrived from the UK in 2014.
“It was clear to me that the conduct journey in New Zealand would be hard yards and would take a good while,” he said during the 19 October event. “I reckon we are no more than half way there.”
When Everett arrived the FMC Act was new and the first wave of licensing under the Act – crowd-funding and peer-to-peer platforms – was soon to be introduced.
“The FMA was busy with what we thought was the tail-end of court proceedings and investigations that came out of the finance company collapses and preparing itself, and the industry, for licensing and conduct regulation under the Act.
“Now in 2021 – the FMC Act is fully operative, the financial advice regime has been substantially revised and we are facing into further major changes to our mandate with the banking and insurance regulation and climate-related disclosures.”
Everett says that while the FMA only had licensing authority over certain sectors of the industry, he had hoped other sectors would change for the better.
“Quite frankly, we have not seen that,” he says. “It took the Royal Commission in Australia and our Conduct & Culture reviews with the Reserve Bank to get some parts of the industry to take note.
It was clear to me that the conduct journey in New Zealand would be hard yards…
“And even now it is requiring court proceedings and sanctions to bring some firms fully to the conduct table. We have asked for – and received – more financial ammunition to bring complex cases that are stoutly resisted by well-resourced financial firms.”
While conceding conduct regulation is complex, Everett says there will always be “crooks, fraudsters, and outliers”.
“As ever with high-level principles, what seems obvious and free from doubt to me as a regulator, may not seem obvious and free from doubt to you,” he says.
“As those who read our report into general insurance recently, we continue to be affronted at instances where we see how little boards and senior management actually do – until the FMA is at their door.”
However, Everett is confident progress has been made.
“This industry in New Zealand will flourish if it remembers who it serves,” he says. “That is every man, woman and child in New Zealand. Our economy cannot thrive without confidence that financial products and investments are offered and sold honestly and fairly.”