Commerce Minister Kris Faafoi has approved the code, which means there will be about nine months until it comes into force.
Existing advisers will be able to make use of a transition period to work towards meeting the new standards set by the code.
While the industry was told little change was likely, there are some significant alterations made in the final version.
Code standard one requires advisers to "treat clients fairly" - removing the proposed "and act in their interests".
Some submitters during consultation had said this crossed over with the requirement in law to give priority to a client's interest.
The code notes that "fairly" will mean different things in different circumstances, but that it includes treating clients with respect, listening to them, considering their views, communicating clearly, not applying undue pressure and not taking advantage of vulnerability.
It notes it does not meant that clients don't take any risk, or are not responsible for their decisions.
A standard requiring advisers to manage conflicts of interest - and avoid them where practicable - has been dropped.
Instead, giving financial advice that is "suitable" has been moved to place three.
The code notes that should mean having "reasonable' grounds for advice. "Reasonable grounds for the financial advice means those grounds that a prudent person engaged in the occupation of giving financial advice would consider to be appropriate in the same circumstances."
Sometimes that would mean a detailed analysis of the client's circumstances were required, or sometimes the adviser might be able to make assumptions based on their characteristics.
Proposed standards requiring advisers to resolve complaints and not bring the industry into disrepute have been removed.
COMPETENCE
The code confirms that the standard of general knowledge and skill is that the person has the capabilities equivalent to the general qualification outcomes of the New Zealand Certificate in Financial Service, Level Two.
They could do this by holding either the first or second version of the certificate, having completed the National Certificate, or by being an AFA before the code took effect.
The draft was contentious in that it expressly allowed entities to have procedures and systems in place to backfill an individuals’ competence and skill.
The new code says only: "A person may demonstrate competence, knowledge, and skill in a way that is different from those listed above, for example by reference to the financial advice provider’s procedures, systems and expertise."
There is no further clarification on the number of CPD hours required - the code only says that individuals must annually plan for and complete learning activities to ensure they maintained the knowledge, competence and skill required and understand the regulatory framework.
THE CODE
1. Treat clients fairly
2. Act with integrity
3. Give financial advice that is suitable
4. Ensure that the client understands the financial advice
5. Protect client information
6. Have general competence, knowledge, and skill
7. Have particular competence, knowledge, and skill for designing an investment plan
8. Have particular competence, knowledge, and skill for product advice
9. Keep competence, knowledge, and skill up-to-date
