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Clare Bolingford, FMA Director of Banking and Insurance, spoke at the Financial Services Council Outlook 2023 on 25 January 2023.

(Notes may differ slightly from speech as delivered)

Kia ora koutou

Nō ingarangi ahau

I tipu ake au ki Nailsworth

Kei Whangaparaoa ahau noho ana

Nō Tūranga nui a kiwa tōku hoa Tane

Kō Ngati Porou tona iwi

Kei Te Mana Tatai Hokohoko ahau e mahi ana

Kō Clare tōku igoa

Kia ora koutou and many thanks for inviting me to speak today. I have met many of you before as Director of Banking and Insurance, but this is the first time I’m speaking to you with a focus on my new role as Executive Director of Regulatory Delivery.

We have brought together the work we do with our various licenced, or soon to be licenced, populations into this new team so we can develop a consistent and relationship-based approach to supervision across all sectors.

What I’ve heard from you is that consistency is one of the things that you value and want to see more of from us – while at the same time being able to appreciate and adapt to the important differences in business models and services.

There has been plenty of work going on to get ready for our expanding remit and to build on the mahi done so far.

We will need to deepen our understanding of your business, not just so we can highlight risks but also opportunities to influence better outcomes for New Zealanders.

We will listen and engage in problem solving, explore the challenges to achieving good outcomes and be flexible to different methods.

And we will be clear and transparent in our communications with you, so you aren’t in any doubt about what our view is.

But as Samantha said, the changes will not happen overnight and we’ll be evaluating what works well and what needs adjustment as we go, including by listening to your feedback.

The three new regulatory regimes comprising the conduct of financial institutions, financial advice, and climate related disclosures are significant steps forward for both the FMA and the industry.

The new financial advice regime is a clear example of where industry and the regulator have worked together with a joint goal of smooth implementation.

To that point, I want to thank the FSC for all the work it’s done in this area, alongside other industry bodies, to ensure our collective goals were achieved.

We want to see New Zealanders becoming more confident about their financial futures and wellbeing. More confident about accessing financial advice and being able to trust that their adviser is working in their best interests.

We all have a role to play helping to promote the value of advice in making well-informed decisions about the products that are most suitable. 

As the 17th March quickly approaches – the date when you must either hold a Financial Advice Provider full licence or operate under someone else’s – around 1,900 firms are now operating under a full licence.

This also signals the end of the two-year competency safe harbour where all financial advisers and nominated representatives must be fully competent under the Code of Professional Conduct for Financial Advice Services.

On Climate Related Disclosures, we’re working closely with other agencies, namely the XRB and Companies Office, to ensure a smooth start to the regime. 

Over the coming weeks we will be giving you an outline of what you can expect to happen and when, and how we can support those entities that qualify.

For CoFI, I’d like to highlight a few key milestones. 

Our intermediated distribution draft guidance will be published next month. I know there is a lot of interest here, and again, I’d like to thank the FSC and other industry bodies for the role they have played in getting people around the table in the series of constructive workshops held last year.

These open and honest conversations were a critical element to, I hope, getting guidance that will work for everyone.

CoFI licensing will open in July, and we are currently in the process of planning more events that will focus on assisting institutions through the application process.

When I spoke at the FSC Conference last year I talked about how CoFI is a move away from box-ticking compliance towards a deliberate focus on outcomes – including proactive analysis of how products are actually performing for consumers, not just the business.

It is a message you will continue to hear from me, Samantha and the FMA as a whole.

CoFI puts the onus on institutions to consider what fairness looks like, and then to formalise that in a fair conduct programme. A programme where everyone in the institution can understand their role in treating customers fairly.

As I’ve said before, you know your business best and that is why you are the best people to design, implement and own your fair conduct programme. This will look and feel different for different institutions.

You will need to put yourself in your customers’ shoes and be honest with yourself as to what that experience was and is really like.

I’d also like to finish with reiterating what we expect during the current, economically challenging, environment.

Customers, some of whom have never experienced anything like the current conditions, will be stretched and feeling pressures they are unfamiliar with.

They will be vulnerable. It is precisely at times like this we expect firms to support their customers with clear communications as well as plans and processes for navigating, and ultimately successfully managing, their problems and stress points during a difficult period.

I’ll now handover to Paul to speak before we come to questions.