He addressed the first day of the Professional Advisers Association conference in Auckland yesterday and told them that the FMA welcomed direction from the industry on where it should focus its monitoring and surveillance efforts.

There were reports of instances where market participants had seen but not acted on other participants’ behaviour, he said. “We can do our job better when you work with us…Tips and complaints are an important source of information for the FMA and we encourage market participants to advise FMS of any poor conduct or behaviour.”

He said market participants should have processes in place to encourage internal whistleblowing if an employee suspected inappropriate conduct within an organisation.

Hughes told conference delegates that tip-offs would be kept confidential.  The FMA was alert to pressures on advisers such as reductions in income because of a drop in funds under management due to the economic downturn, he said.

The FMA wanted to take a “top of the cliff” approach to raising standards. “We are seeking to foster a culture in which market participants proactively work to set appropriate standards, put in place a robust approach to managing and monitoring compliance and willingly share information with us, including reporting breaches.”

But the FMA would only do its job well if there was advice from the market on what it needed to be looking at. “We ask you to play your part by bringing your concerns or issues to us.”

He said the FMA would direct its resources towards identifying, prioritising and solving important problems. “We all need to be alive to practices that may be causing harm, including poor insurance product replacement policies.”