Analysis doesn’t require analysts, says FMA

The FMA has released a guidance note in response to confusion amongst advisers over Code Standard 6 (d) of the Code of Professional Conduct for Authorised Financial Advisers, highlighted recently by the initial public offering for Energy Mad.

This part of the code requires advisers "make recommendations only in relation to financial products that have been analysed by the AFA to a level that provides a reasonable basis for any such recommendation, or analysed by another person upon whose analysis it is reasonable, in all the circumstances, for the AFA to rely."

Advisers were concerned they might be in breach of this section if they recommended Energy Mad to clients, as due to its small size it had no analyst coverage.

However, the FMA said third-party analysis isn't a prerequisite.