NZ regulator agrees to 'fewer questions' for adviser regulatory form

The Financial Markets Authority (FMA) has confirmed the information that all classes of licensed advisers must provide in their regulatory returns following a consultation.

FMA says it has “carefully” considered industry feedback and has proceeded with a balanced reporting option that includes “fewer questions” than proposed, as well as refinements to some questions.

The regulator has withdrawn some of the proposed questions as they are better suited for future one-off requests or thematic reviews.

Accordingly, a “dynamic” reporting form will be introduced, where advisers only need to answer questions relevant to their licence class and the financial advice services they provide.

“The balanced regulatory reporting returns will allow us to implement a more effective, risk-based approach to monitoring financial advice provider businesses,” Executive Director for Regulatory Delivery Clare Bolingford said.

“Overall, these regulatory returns support our supervision approach, so we can target our resources efficiently to identify those areas of highest potential risk of harming consumers.”

She says the FMA will take a “reasonable approach” while the market implements information-gathering processes and systems.

“We will engage with the sector to provide guidance and expectations for completing the first regulatory returns leading up to the reporting commencement date in July,” Ms Bolingford said.

“We expect that in subsequent years, financial advice providers will provide increasingly more accurate answers as their processes mature.”

The first regulatory returns will be due by September 30 2024, for the reporting period from July 1 2023 to June 30 2024.

Under New Zealand laws, all licensed financial advice providers are required to complete and submit an annual regulatory return. The regulatory return is a series of questions to obtain an up-to-date understanding of the nature, size and complexity of your financial advice provider service.

FMA says it will use the information to monitor licence holders’ ongoing capability to effectively perform the financial advice service according to the applicable eligibility criteria and other regulatory requirements.