Observations from the FAP monitoring insights report

The FMA have released a report on their findings, following monitoring visits to around 60 FAPs.  These are my observations of some of their findings as they relate to advice issues for life insurance advisers.  Advisers and FAPs are strongly encouraged to read the full report to understand all the issues raised.

In general terms the FMA seems to be reasonably happy with what they have found. They have given many clues to conduct they would like to see and indicated some ‘gaps’ where FAPs can and must do better.

The root cause of some of these ‘gaps’ according to the FMA is “…complacency, where the FAP has taken a ‘tick-box’ approach to compliance instead of making an effort to fully understand the purpose of the new obligations.” 

It’s probably fair to expect that if the next round of monitoring visits doesn’t show improvement in the areas identified as needing work, the FMA’s response will be tougher.