In a keynote address to Financial Advice NZ’s inaugural Advice Policy Summit, FMA CEO Samantha Barrass reiterated that its regulatory priorities for the 2026-2027 year include how it manages conflicts from remuneration structures in financial advice, stressing the FMA is not opposed to commissions.
“First, let me be clear – the FMA is not opposed to commission, nor leading a review on the level of commissions,” she told the summit. “It is one of several legitimate forms of remuneration in these sectors. Our focus is on how conflicts are managed, which is a regulatory requirement.”
She told the 200 attendees at the Auckland event, hosted by Financial Advice NZ in conjunction with the Financial Planning Standards Board Asia Pacific Forum, that the FMA “…has a clear view about the behaviours it doesn’t want to see, motivated by commissions-based remuneration. This includes pressure selling, churn, poor or misleading advice, and fraudulent activity.”
Barrass says the FMA expects intermediaries it regulates, like financial advisers, to have controls to prevent and detect such behaviours, noting it is also interested in what is set out in product provider agreements.
She also pointed to situations where there is a disconnect between commissions and the servicing expected over the lifetime of a product.
…advisers should make sure they have effective processes and controls in place to manage conflicts linked to commissions…
As too what advisers can do to ensure they’re doing the right thing, Barrass says they should make sure they have effective processes and controls in place to manage conflicts linked to commissions.
“This includes detecting and preventing poor behaviour in the adviser workforce. This should include monitoring governance, business models, and how relationships with product providers may influence conduct.”
“We also want to make sure consumers understand what they will be receiving from ongoing services.”
Flexibility of the Principles-based Regime
During her address Barrass also noted that one of the topics from its Access to Advice report that it’s been talking to financial advisers about the most is the flexibility of the principles-based regulatory regime.
…this gives advisers the opportunity to right-size advice depending on what their clients’ needs are…
She says this gives advisers the opportunity to right-size advice depending on what their clients’ needs are. The FMA is developing case studies to give examples of how the regime can be applied well to address accessibility challenges.
“Areas we are seeking to explore is giving advice at scale, single-issue advice, giving advice on more straightforward financial products, and advice given for the decumulation of hard-earned retirement savings.”
The FMA is still engaging with the sector on these case studies and will start publishing them later this year with a series of roundtables and meetings planned to progress this work, she told the summit.
