The Securities Commission's Code Committee yesterday released a draft Code of Professional Conduct for Authorised Financial Advisers (the Code). The Code Committee has invited submissions on the draft Code, which must be received by 7 May. The draft Code will then be finalised, approved by the Commissioner for Financial Advisers, and sent for ministerial approval.
The draft Code prescribes minimum standards of conduct that must be met by all authorised financial advisers (AFAs). Specifically, the minimum standards cover ethical behaviour, client care, competence, knowledge and skills, and continuing professional training.
Notable features of the draft Code include:
the introduction of a new concept of "wholesale client". Certain Code standards do not apply to the extent that financial advice is provided to wholesale clients;
an obligation to determine the suitability for the client of the AFA's financial adviser services where "personalised financial advice" (another new concept) or a financial planning service is provided;
potential relief from the minimum qualification standards in relation to "corporate advice provided in respect of capital raising and other investment banking-type functions"; and
an obligation to complete at least 20 hours of continuing professional training each year.
A copy of the draft Code can be downloaded from the Code Committee's website: http://www.financialadvisercode.govt.nz/survey.
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This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.