All authorised financial advisers will receive a hard copy of the new Code of Professional Conduct for AFAs over the next couple of days. It makes changes to several aspects, including new rules about continuing professional development (CPD), a restructure of the standards relating to client care, and a new rule allowing AFAs who haven’t sat investment qualifications to advise on KiwiSaver.

FMA head of primary regulatory operations Simone Robbers said there had been a very positive response to the code.

She said the FMA was keen to see more consumers seeking advice from investments advisers and more registered financial advisers looking to move to AFA status.
“This is something we will continue to talk to industry associations and adviser firms about,” she said.

The numbers of AFAs have dropped over recent years, from 1958 in the year to May 2012 to 1904 in the period ended March 2014. RFA numbers have fluctuated, from 7112 in 2012 to 6457 last May and back up to 6536 this March.

Robbers said it was too soon to draw any conclusions about long-term trends or to say that regulation was driving the drop in numbers.

She said there was no evidence regulation was to blame. “The Financial Advisers Act and Code of Professional Conduct have both been in force for nearly four years and the changes relevant to financial advisers through the Financial Markets Conduct Act are not yet fully in force.”

She said the professional standards of financial advisers were improving steadily and there was support from those in the industry for the work the FMA is doing, especially when it was seen to benefit clients.