The FMA's draft guide in its consultation document outlines seven “fair outcomes,” although it says these are not new rules or regulations.

The shift in emphasis “raises serious questions for how the financial services sector will be regulated in practice and runs a risk of enforcement by hindsight bias,” the law firm says.

“While we agree that considering consumer outcomes is a beneficial lens for decision-making, we query whether it provides the necessary certainty when 'non-compliance' can lead to potential liability,” DLA Piper says.

“This is a crucial consultation for the sector. Robust and thoughtful submissions will be important.”

The FMA says it wants financial services providers to focus on “fair outcomes for consumers and markets.”

“Rules and 'tick box' compliance are not an end in themselves,” the regulator says.

The fair outcomes it outlines include ensuring consumer have access to appropriate products and services that meet their need, that they receive useful information that aids good decisions, that they receive fair value for money and that they can trust providers to act in their interests.

The other three outcomes the FMA is seeking are that consumers receive ongoing care, that markets are trusted based on their integrity and transparency and that markets enable sustainable innovation and growth.

“Providers of financial products and services are expected to take ownership of the outcomes and consider how their governance, leadership, management, and operations work together to deliver the outcomes in a way that is most appropriate and effective for their business,” the FMA says.

“Developing consistency and certainty about our approach and the results we are focused on will make our vision clearer and more practicl for the financial sector,” it says.

The regulator's general counsel, Liam Mason, says the FMA will “always be a risk-based regulator” and will use a range of tools to respond proportionately to any harms and misconduct it identifies.

“We believe that beginning our conversations with firms based on the outcomes we want to see will help prevent harm in the first place,” Mason says.

The FMA's new approach “will require a shift in culture and mindset from us and firms to think about the results we want and have a shared interest in delivering for New Zealanders.”