Commerce and Consumer Affairs Minister Kris Faafoi has announced a new Code of Professional Conduct for Financial Advice Services, which is expected to come into force in mid-2020.

The new code sets standards of competence, conduct and client care for the whole financial advice industry. The standards will apply after the Financial Services Legislation Amendment Act 2019 comes into force.

The code has been prepared by the Financial Advice Code Working Group which consulted with the financial advice industry and consumers in October/November 2017 and March/April 2018. While approved, it is not yet in force.

Mr Faafoi says anyone giving financial advice to consumers will need to act fairly and with integrity when they give advice, and to meet a minimum standard of competence. Businesses that provide financial advice will need to be licensed.

“Serious issues were identified by the FMA and RBNZ in their recent reviews of the banking and life insurance sector. The code, alongside the new financial advice legislation, will help address those issues by ensuring consumers’ interests are much better served. The Government is also fast-tracking measures so that consumers get a fair deal from banks and insurers, and is currently seeking feedback on options to achieve this.”

Businesses will have at least six months to obtain a transitional licence, and a further two years to become fully licensed and meet the competency requirements set by the code.