[UPDATED] Liam Mason said he could not get into the detail about how the FMA reached the decision to issue a warning about Brian (John) Ferguson, but talked generally about how the FMA deals with concerns about advisers.

Ferguson was reported to the regulator by his own group, Preferred NZ, for copy-and-pasting client signatures.

Commenters said it could make it difficult for him to continue in the new financial advice regime.

Mason said that was something that the FMA took into account.

But he said, if it was something that clients – present or future – should know about, it was important to be transparent.

It could also serve as a warning to other advisers. “As a regulator we are trying to influence behaviour right across the market. Transparency is an important part of that to make sure the message gets out there about what is unacceptable.”

He said the FMA received more complaints about insurance advisers than investment advisers, and that was why it had had more of a focus on that sector.

It discovered concerns to investigate through its own routine monitoring, he said, or from complaints from members of the public, other advisers, firms and product providers.

Due to the number of complaints and tips received, it could not look at all of them but would prioritise them on the basis of the risk of harm and what breached of legislation were involved. “Sometimes we put things aside for using as part of intelligence. Nothing is thrown away.”

The cases in which there had been a warning made public about an adviser all involved a breach of the law, he said.

When a warning was being considered, the adviser would be briefed about what the FMA thought had been done wrong, and what action was being considered. The adviser would be given an opportunity to explain the situation and argue the facts and well as the FMA’s proposed outcome. There was also a chance to meet face-to-face for a hearing on the issue, he said.

The adviser would be able to take a lawyer or other support to that meeting.

The FMA has a range of actions it can take with AFAs, including giving direction, a warning, referral to the FADC, suspension or cancellation of licence, or court action.

At present, it has fewer tools for RFAs.

Mason said the FMA did not have to think the law had been broken to take action.

“Our function under legislation is to review the conduct in the market. So if we think something is potentially harmful, whether or not it’s illegal, we can comment publicly on it.”