FMA's first Conduct Report sets 2025 priorities for financial sector

FMA outlines 2025 conduct priorities and risks

FMA's first Conduct Report sets 2025 priorities for financial sector

The Financial Markets Authority (FMA) has released its inaugural Financial Conduct Report (FCR), offering financial sector participants greater transparency on its upcoming priorities. 

The report will become an annual publication for stakeholders across banking, insurance, capital markets, investment management, and financial advice – providing insight into FMA’s regulatory direction. 

“Setting out our priorities and the drivers behind them” 

FMA chief executive Samantha Barrass (pictured) said the new report reflects the regulator’s commitment to deeper industry engagement and clarity. 

“We are responding to the clear desire for transparency, certainty, and improved engagement with the sector, by setting out our priorities and the drivers behind what we’re doing,” Barrass said. 

“Importantly, our report provides context and reasoning for these priorities by outlining key conduct risks and opportunities on the FMA’s radar over the next 12 months and how we plan to address them.” 

She said the economic climate makes the report especially timely. 

“We are publishing this FCR in the context of an uncertain economic outlook, geopolitical changes, financial pressure on households and businesses, and an expanding regulatory remit for the FMA,” Barrass said. “This underscores the importance of engaging with the industry and stakeholders, to identify and respond to emerging risks.” 

A tool for better market outcomes 

Barrass encouraged industry leaders to integrate the report’s findings into their strategy. 

“We encourage boards, executives and leaders to use the FCR to understand the FMA’s regulatory priorities for the coming year and consider how these insights can help their business ensure better outcomes for consumers and markets,” she said. 

“We have a number of priorities across the sectors we regulate.” 

Barrass said the FMA will continue providing licensing, monitoring, guidance, and enforcement to bolster market confidence. 

Focus on complaints, scams, and custody 

Among the specific priorities for 2025/26, FMA aims to improve consumer protections and enhance confidence in the financial system. 

“We want to ensure consumers know how to complain and we’d like industry to take swift action to stop further harm and provide timely remediation when issues arise,” Barrass said. 

“We are actively working with other agencies and business to disrupt scam activity that originates within New Zealand to protect consumers from investment scams, which are increasingly affecting New Zealand consumers, and are growing in complexity and volume. We will continue to issue public warnings that highlight the high incidence of these misconduct cases. 

“In addition, safekeeping of client money and property is fundamental for confidence in financial markets. So, we’ll be working with the Ministry of Business, Innovation and Employment (MBIE) to improve protections for assets held in custody. Strong custody is not just important to protect against fraud. Robust client asset protection provides confidence in our regulatory environment.” 

Financial advice sector under the spotlight 

FMA has also highlighted financial advice as a key area of focus. It plans to review how Financial Advice Providers disclose fees, commissions and incentives, and whether clients understand the cost and scope of the advice they receive. 

“We observed some gaps that pose risks to FAP clients, including a lack of clarity regarding commissions and inconsistent or delayed disclosures,” the report said. 

The regulator will also investigate conduct that affects consumers in vulnerable circumstances and assess whether financial advisers are recommending suitable products, particularly in mortgages and insurance. 

“Supporting advisers in how to deal with vulnerable customers provides an opportunity for both product and advice providers to improve controls and outcomes,” FMA said. 

A broader review of advice accessibility – including the impact of compliance burdens, innovation and AI on service delivery—will also form part of the FMA’s 2025/26 agenda. 

In a major new initiative, FMA recently announced that it will review barriers to accessing financial advice – examining regulation, technology, and business models – and explore how innovation, including AI, can improve availability and affordability. 

Supporting fintech and market growth 

FMA is also aiming to support innovation and streamline regulation. 

The regulator said it is supporting innovation and growth by piloting a regulatory sandbox for fintechs and working toward a single conduct licence, helping firms test new products in a controlled environment and identify regulatory barriers. 

Ready for emerging risks 

The report also sets out how FMA is preparing for the future of finance. 

“The report also demonstrates how we are readying ourselves for emerging risks and opportunities such as virtual assets, tokenisation, and industry readiness for operational resilience,” Barrass said. 

“We anticipate the FCR will become an annual go-to reference point for the FMA, stakeholders and media to understand where it is focused, and what it aims to achieve for the year ahead.” 

A roadmap for transparency and confidence 

Barrass said the report outlines how the regulator plans to fulfil its statutory obligations. 

“Overall, this report is a roadmap that sets out over the next 12 months why and how we are working towards achieving our statutory objective: to promote and facilitate the development of fair, efficient and transparent financial markets, and to promote the confident and informed participation of businesses, investors, and consumers in financial markets,” she said. 

Read the FMA announcement and the full FMA report for more information.