New Code submitted to FMA

The main changes from the current code include:
- Clarification that code standard one is paramount. This requires advisers to place the interests of their clients first and act with integrity.
- A provision allowing AFAs to advise on KiwiSaver first-home withdrawals without sitting investment qualifications.
- Increasing the number of structured professional development hours AFAs are required to undertake over two years from 20 to 30 hours, while broadening the definition so there is more flexibility in determining what counts as structured.
- A new code standard for transparently managing conflicts of interest.
- Restructuring the key code standards relating to minimum standards of client care.

Committee chair David Ireland said: “It became clear during the consultation process that the Code’s principles-based approach is supported by the adviser industry. The proposed changes therefore align with this approach but clarify certain principles, particularly where uncertainty as to their application was expressed.”

The final version of the code has to be approved by the FMA before it can be sent to the Commerce Minister for final acceptance.

The Code is expected to come into force mid-2014.