Revised Code of Conduct submitted to FMA

News release
5 December 2013

Revised Code of Conduct submitted to FMA

The Code Committee for Financial Advisers has submitted its proposed revised Code of Professional Conduct for Authorised Financial Advisers (AFAs) to the Financial Markets Authority (FMA).

Code Chair, David Ireland said, “It became clear during the consultation process that the Code’s principles-based approach is supported by the adviser industry. The proposed changes therefore align with this approach but clarify certain principles, particularly where uncertainty as to their application was expressed.”

Key changes proposed from the current code include:

• clarifying that code standard 1 is paramount, to place the interests of the client first and act with integrity

• a provision enabling AFAs to advise on KiwiSaver first home withdrawals without sitting investment qualifications

• increasing the number of structured professional development hours AFA’s are required to undertake spread over two years from 20 to 30 hours, whilst broadening the definition of structured professional development so there is greater flexibility for AFAs in determining what will count as ‘structured’

• a new Code Standard for transparently managing conflicts of interest

• restructuring the key Code Standards relating to minimum standards of client care

Mr Ireland said the Committee was grateful for the engagement shown by AFAs and interest groups throughout the review.

The final version of the Code must be approved by FMA before it can be sent to the Minister of Commerce for final acceptance. Following acceptance, FMA will give notice in the Gazette of the date when the new Code comes into force, which is anticipated to be early to mid-2014.

Ends

About the Code of Professional Conduct for Authorised Financial Advisers:

The Code establishes minimum standards of competence, knowledge and skills, ethical behaviour and client care, along with minimum requirements for continuing education, and training for AFAs. It is required under the Financial Markets Authority Act 2008.

The Code is developed and maintained by a Code Committee for Financial Advisers, appointed by the Financial Markets Authority. Current Code Committee members are: David Ireland (Chair), Ross Butler, Shane Edmond, David Russell, Professor Dimity Kingsford-Smith, Gary Young and Michael Staal.

Further information about the Code and the work of the Code Committee can be found at the Committee website: www.financialadvisercode.govt.nz

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