Advisers have welcomed the new Code of Conduct’s simplicity, but called on the industry to get qualified and achieve their Level 5 to build confidence with lenders and the public.
Commerce and Consumer Affairs Minister Kris Faafoi approved the code yesterday. The code, alongside the new regulatory regime for financial advisers, comes into effect in about nine months.
The new code allows advisers who are nominated representatives to operate under an FAP without mandatory qualification requirements.
NZFSG’s head of growth Bruce Patten said anyone who “wants to take this industry seriously”, needs to achieve their qualifications, and “not just roll under somebody else’s”. He added: “Banks will still require advisers to have minimum entry level, which is more than half of the Level 5 core strand anyway.”
Katrina Shanks, CEO of Financial Advice NZ hit out at the lack of a minimum requirement for those under an FAP. She said she was "disappointed that the Code does not require a minimum qualification for all persons providing regulated financial advice, or a minimum requirement for CPD. A key objective of the new regime is to build public confidence and trust in the financial services sector: ensuring that New Zealanders deal with qualified people is an absolutely crucial component in this."
Shanks added: "The final Code will set up a two-tiered system of advisers: a mandatory qualification for ‘individual’ financial advisers, and ‘equivalence’ for nominated representatives. In our view, this does not best serve New Zealanders.
Overall, Patten said he was pleased with the final look of the code, and described it as “simple, and easy to understand” for advisers.
Craig Pope of Pope & Co Mortgages said “most good advisers will be following” the code’s principles already. He added: “Advisers will need to think about their processes and how they document meeting the code should there ever be any dispute.”
You can find a full breakdown of the Code -- and what it means for all financial advisers, here.