Update from Code Committee Chairman

The Code Committee notes that Parliament has agreed to the Select Committee recommendations and amendments with respect to the Financial Advisers Act.

Finalising the Act is an important milestone. It provides us with sufficient certainty to be able to formally proceed with completing our task of developing the draft Code of Professional Conduct for Authorised Advisers.

We are doing so on the basis that regulations to be promulgated under the Act will allow category 2 product advisers such as mortgage brokers and life insurance advisers to voluntarily opt into the authorisation regime.

We also appreciate that the legislation passed yesterday outlines that the Code will be used as the benchmark for entities and groups seeking to become Qualifying Financial Entities.

Next week we propose to publicly release an updated version of the draft Code. This document will take into account the latest legislative amendments, and will reflect the consultation input we have received from many advisers and organisations.

The Code Committee will then initiate a final series of quick, targeted consultation opportunities, for consumers, advisers, and organisations to submit on any new or outstanding matters. This activity will include public forums in mid-July, meetings with the Committee, and the opportunity to provide formal brief submissions.

Our objective is to have a draft Code available before the end of July for formal presentation to the Commissioner for approval.

We appreciate that many of you, and your organisations, have invested in the future of professional financial advice in New Zealand, and that others are poised to do likewise.

The release of our draft Code next week, the quick, final consultation process, and the formal presentation of the Code, will provide you with the ability to confidently plan and execute the role you will play in the new regime.

ENDS

Ross Butler 
Chairman, Code Committee

Draft Code for consultation released

31 March 2010

The Code Committee has today released the draft Code of Professional Conduct for Authorised Financial Advisers for public consultation.

The draft Code outlines the minimum standards of professionalism that all Authorised Financial Advisers (AFAs) will be expected to meet under the new regulatory regime for financial advisers.

The Code Committee is an independent committee appointed by the Commissioner for Financial Advisers. The Code Committee has been developing the draft Code over the last eight months.

Code Committee chairman Ross Butler said the Committee had consulted widely in order to develop the draft Code.

“We appreciate the large number of submissions and feedback we have received. Through our work with consumers, advisers, professional bodies, companies, government agencies and training and assessment providers we have taken into account a great number of different views. We’re confident the result is a draft Code that is consistent with the purpose of the Financial Advisers Act – to promote sound and efficient delivery of financial advice and encourage public confidence in financial advisers,” Mr Butler said.

Mr Butler said a series of information meetings on the draft Code will be held around the country in early April and that interested parties were encouraged to submit their feedback.

The deadline for submissions is 5.00pm, 7 May 2010.

The Code Committee will consider all feedback, make any changes necessary to the draft Code and present it to the Commissioner for Financial Advisers for approval in June 2010. Following this, the Code will be submitted to the Minister of Commerce for final approval and gazetting.

The draft Code, more information about the meetings and how to make a submission can be found on the Code Committee website at www.financialadvisercode.govt.nz

Ends

For more information, please contact: 
Ross Butler, Chairman, Code Committee, phone 021 359 899

Code Committee Releases Consultation Paper – Proposed Minimum Requirements of Continuing Professional Training

19 January 2010

The Code Committee today released the third in a series of consultation papers. The paper is availableĀ onlineĀ (PDF 150KB).

The Financial Advisers Act 2008 requires the Code to provide for Continuing Professional Training (CPT) for Authorised Financial Advisers (AFA), and to specify minimum requirements that an AFA must meet for the purposes of CPT.

This latest discussion paper outlines the key objectives of our proposals, the proposed minimum CPT requirements, how the requirements might be recorded and monitored, and makes reference to CPT and CPD programmes provided by professional and other bodies.

The Code Committee welcomes submissions on the discussion paper, which includes a list of consultation questions. We encourage and value your feedback.

We also expect to hold three consultation meetings, which are likely to be on 8 and 10 February, in Auckland, Wellington and Christchurch. Having these meetings will depend upon the level of interest by advisers, their employers, industry and professional bodies, consumers, and other parties. Please let us know at consultation@financialadvisercode.govt.nz if you would like to participate.

Submissions on this discussion paper must be received by 5pm Friday 12 February 2010 and should be sent to:

consultation@financialadvisercode.govt.nz or

posted to: Code Committee, c/o Securities Commission, PO Box 1179 Wellington 6011.

Ross Butler
Chairman, on behalf of the Code Committee.
Wellington, 19 January 2010.

ends

Getting Ready for Authorisation – New online self-evaluation Tool

19 January 2010

ETITO has made available a tool that will provide advisers with an indication of any current knowledge and/or skill gaps they might have across the range of unit standards within the National Certificate in Financial Services( Financial Advice)(Level 5).

The online tool is available at www.afacompetence.org.nz

This site also enables advisers to subscribe to RSS feeds with competence updates on the latest news page.

There is a $28(+GST) fee, and advisers will need to complete the questionnaire which covers the unit standards contained within Standard Sets A, C, and D (including specialist questions for investment, insurance and residential property lending) that we have proposed. Advisers will receive a one-off profile report that will help them determine their next step(s) regarding training and assessment.

Completing the questionnaire does not count towards any assessment for the National Certificate.

Thanks to ETITO, Open Polytechnic, and the financial services industry people who designed this useful tool.

ends

Code Committee releases consultation paper on proposed minimum standards of ethical behaviour and client care for authorised financial advisers

17 November 2009

The Financial Advisors Code Committee has released a consultation paper on proposed minimum standards of ethical behaviour and client care. The Code Committee seeks feedback and submissions on this consultation paper by 5pm 18 December 2009.

Chairman Ross Butler said that the Committee has proposed an over-arching ethical behaviour standard.

“The first principle is that any authorised financial adviser must place their client’s interests first and act with integrity,” he said.

The Committee is proposing that financial advice must be independent and objective, unless the adviser clearly communicates the lack of independence and/or objectivity to the client, and puts in place appropriate safeguards. This could include offering the client the opportunity to take independent advice.

Ross Butler said that the proposed Code also includes client care standards.

“Client care is critical to the delivery of good advice, and we are proposing that advisors must build seven client care principles into the way they work with their clients,” he said.

These standards are:

  • professionalism;
  • suitability;
  • capability and capacity;
  • effective communication;
  • effective dispute resolution;
  • compliance; and
  • custody.

The consultation paper may be downloaded from www.financialadvisercode.govt.nz

For a hard copy phone 04 472 9830 or email secretariat@financialadvisercode.govt.nz

ends

For further information please contact Ross Butler, Code Committee Chairman, ph 021 359 899

Code Committee determines baseline standards for financial adviser competency

14 August 2009

Code Committee Releases Consultation Paper on Proposed Minimum Standards of Ethical Behaviour and Client Care for Authorised Financial Advisers

The Financial Advisors Code Committee has released a consultation paper on proposed minimum standards of ethical behaviour and client care. The Code Committee seeks feedback and submissions on this consultation paper by 5pm 18 December 2009. Chairman Ross Butler said that the Committee has proposed an over-arching ethical behaviour standard.

“The first principle is that any authorised financial adviser must place their client’s interests first and act with integrity,” he said.

The Committee is proposing that financial advice must be independent and objective, unless the adviser clearly communicates the lack of independence and/or objectivity to the client, and puts in place appropriate safeguards. This could include offering the client the opportunity to take independent advice. Ross Butler said that the proposed Code also includes client care standards. “Client care is critical to the delivery of good advice, and we are proposing that advisors must build seven client care principles into the way they work with their clients,” he said. These standards are:

  • professionalism;
  • suitability;
  • capability and capacity;
  • effective communication;
  • effective dispute resolution;
  • compliance; and
  • custody.

The consultation paper may be downloaded here

ends

For further information please contact Ross Butler, Code Committee Chairman, ph 021 359 899