Where to with complaints? FMA or FDR?

There has been coverage in the media recently regarding the Financial Markets Authority (FMA), which may generate greater public awareness about the new financial service providers and advisers regime. 

However there may also be some confusion about which organisation a consumer would approach with a complaint - FDRS or FMA?

The short answer is contact  FDRS first, even if it is appropriate that the complaint is handled by FMA.

There are two reasons for this:

  • If the dispute or complaint seeks redress or compensation from the financial service provider, FDRS can liaise with the financial service provider to make sure the organisation has the opportunity to deal with the complaint before it is elevated to a dispute.
  • If the consumer goes directly to the FMA it is possible that the complaint couldn't then be considered by FDRS. The consumer may not get any compensation, or redress.

A consumer should go to FMA if they are not seeking redress, and if they believe a person or company providing financial advice has breached the Financial Advisers Act 2008. For example:

  • failing to exercise care, diligence and skill when providing financial services
  • claiming to be a financial adviser or providing financial services when they are not allowed to do so
  • failing to comply with disclosure or conduct obligations
  • behaving misleadingly or deceptively.

Consumers can also complain if an Authorised Financial Adviser fails to follow the Code of Professional Conduct for Authorised Financial Advisers. For example if financial services provider:

  • implies they are independent when they are not
  • fails to put client's interests first
  • fails to act with integrity.