The new code of professional conduct has been approved by Minister of Commerce and Consumer Affairs Kris Faafoi, and is set to be implemented in mid-2020 – however, industry body Financial Advice New Zealand (FINANZ) says the code has fallen short in the ‘crucial area’ of qualifications and professional development.
CEO Katrina Shanks says FINANZ is disappointed that the Code will not require a minimum qualification for nominated representatives as well as individual financial advisers – a decision she says “does not best serve New Zealanders.”
“A key objective of the new regime is to build public confidence and trust in the financial services sector,” Shanks stated. “Ensuring that New Zealanders deal with qualified people is an absolutely crucial component of this.
While we are supportive of main areas of the code and applaud the straightforward structure and language, we remain disappointed that the Code does not require a minimum qualification for all persons providing regulated financial advice, or a minimum requirement for CPD.”
Shanks says it is “fundamental” that every financial adviser maintains an ongoing commitment to professional development and to keeping their knowledge up to date as the market evolves. She says the Code needs to have a minimum CPD requirement, and also expressed surprise that Standard 1 – the requirement which supports a customer-centric approach to advice as opposed to focusing on sales – no longer contains the language “to act in their client’s interests.”
“Putting the client’s interests first is a cornerstone behaviour of professionalism, and as such should be reflected in the Code of Professional Conduct,” she stated.
Minister Faafoi said that all financial advisers will need to act “fairly and with integrity,” and all businesses that provide financial advice will require a license. Advisers will have six months to obtain a transactional license, and a further two years to become fully licensed and meet all competency requirements.