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Authorised Financial Advisor Code of Conduct changes

09 September 2016

Changes to the Code of Professional Conduct for Authorised Financial Advisers will come into force on 1 December 2016.

Commerce and Consumer Affairs Minister Paul Goldsmith says the changes aim to improve access to personalised advice, so that more New Zealanders can get financial advice that is tailored to their wants and needs.

He says the Code Committee has worked with industry to provide further clarification for advisers around their scope of service.

The Code Committee says the key changes are:

  • The default minimum competence, knowledge and skills standard has been amended to require AFAs to attain the components of the New Zealand Certificate in Financial Services (level 5) that are relevant to their work (Code Standard 16). 

  • Acceptable alternative qualifications identified in the Competence Alternatives Schedule have been revised to reflect the new default minimum standard. 

  • As a transition measure, the old default minimum standard of the National Certificate in Financial Services (Financial Advice)(Level 5) will continue to be recognised for authorisations coming into effect before 1 January 2019.

  • Code Standard 8 has been restructured, with a new Code Standard (Agreeing the nature and scope of service) introduced, and the prescribed requirements that needed to be satisfied to comply with the Suitability Code Standard (now Code Standard 9) have been removed. The previous relief for AFAs acting on client instructions where transactional advice is involved has also been removed, given the new mechanism for agreeing the nature and scope of financial adviser services at the outset. These changes are aimed at improving client access to personalised advice.

  • Code Standard 3 has been amended to clarify that providing a discretionary investment management services does not preclude an AFA from being able to state or imply that they are independent, or that any financial adviser services provided are independent.

  • The Definitions Schedule has been revised to reflect the changes to Code Standard 16 and the Competence Alternatives Schedule, and the end of the transition period for the Financial Markets Conduct Act 2013.

Last updated on the 16th September 2019