Submissions received by the Code Working Group throughout the consultation process for the design of the new code have been made public. 

The finalised code is expected to be revealed soon.

A submission, without any identifying details, said “if you expect advisers to work for peanuts you will end up with poor outcomes as quality advisers will leave the industry”.

The draft code suggested a level five qualification as a minimum standard for advisers.

“We should be able to sit a test to pass if experienced," the submission said.

"With the last regulation we were made to sit low level papers of a fifth-form level, run by people who couldn't make it in the industry and that taught us nothing. Total waste of time and insulting to our intelligence. I'm unaware of a service failing from advisers. There are some rogues in the industry (a lot less now) remove them. Most of the people in the industry do a great job.”

The submission said there was too much paperwork.

“I challenge you to demonstrate my level of financial knowledge. I'm willing to learn from people who know more than me - but you will appoint low-level people to teach us nothing. I'm all for raising standards in the industry 100%. However, I have never seen relevant training provided, just low level rubbish training for large fees. I suggest to be in Parliament you do financial courses to show that you can manage people’s money properly – that’s much more of a failing then the financial advice industry.”

One RFA insurance adviser, who also did not want to be identified, agreed the draft code provided inadequate acknowledgement of time in the industry.

“It is unrealistic to expect advisers who have been in the industry and who can prove competence to require further qualifications,” the RFA said.

“Restricting new entrants to those with university degrees may limit growth in the industry. A degree does not necessarily make you a good adviser and the majority of the good advisers currently in the market do not have these qualifications. There does need to be a standard but we do need to be wary of making this too high.”

The RFA said there were also some advisers in the market who should not be there.

“When an adviser has an agency cancelled by an insurance company for bad practices then this should put them out of the industry. They should not be offered agencies by other companies and allowed to continue to operate. This is where you see client bases churned.

“The banks need to be under the same policy replacement rules as advisers. So often we see clients change policies to the bank and they are not given a comparison of the two products.”

Another submission from someone who said they were not an adviser said inducements, rebates and cashbacks for advisers needed to stop.

“These are bad practices and will cause harm and damage to the industry plus these are not putting clients' interest in the first place.

“There should be mandatory training to be attended by advisers and the regulators must conduct courses and classes. If not what is FMA doing?”

Another RFA said there needed to be a minimum English competency requirement for advisers.

“All insurance contracts were written in English in NZ and all communication between the advisers and insurance companies were done in English. This includes submitting insurance applications, underwriting process and claims. So an insurance adviser needs basic competency of English to work in this industry.”