Three public meetings on new Code planned

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Three public meetings are being held next week to give consumers and financial advisers a final opportunity to comment on the draft Code released last Friday.

Tuesday, July 6th 2010, 4:48AM

by Jenha White

Code Committee chairman Ross Butler says the sessions will be relatively informal and will run for around 90 minutes.

"We are not seeking to relitigate issues previously raised; instead, we want to ensure that we have fairly addressed all substantive issues in light of the revised scope of the financial advisers regime."

The Institute of Financial Advisers (IFA) president Nigel Tate says the Institute welcomes the release of the latest draft Code which has granted some relief for Certified Financial Planner and Chartered Life Underwriters who now automatically qualify as meeting several of the mandatory standards required to achieve Authorised Financial Adviser (AFA) status.

"We are very pleased the Code Committee has taken on board our recommendations. It signals recognition by the committee that CFP and CLU, and its associated mentoring and continuing professional development requirements meet high industry standards." 

New Zealand Mortgage Brokers Association (NZMBA) chairman Darren Pratley is glad to see that the Code is being put forward with the assumption that regulations will be promulgated under the act allowing category two product advisers to voluntarily opt into the regime.

"It's very positive for mortgage brokers and insurance advisers to have that option to provide a higher level of service by stepping up to be an AFA. It is good for the long term position of the industry."

Securities Commission director supervision Angus Dale-Jones says the Ministry of Economic Development are working on regulations to allow certain category two advisers to become authorised financial advisers, so long as they comply with the Code's conduct and competence requirements relevant to their sector of the profession.

"Compliance with the Code is good for professionalism and for the reputation of the industry."

Dale-Jones says the Securities Commission welcomes the finalisation of the legislative process and it is now focused on helping people transition into the new regime and making the implementation - over the period to 30 June 2011 - a success.

He says there is now a lot for advisers to do, such as getting their competence assessed, preparing their Adviser Business Statements, reading and understanding the draft Code and the new law, and joining a disputes resolution scheme.

"These are all positive behavioural changes for the industry, and will help ensure that there are consistent minimum standards of conduct and competence across the profession."

Dale Jones says the Securities Commission has been gearing up for this legislation for many months now, so much of its planning remains unchanged.

 "While any change to legislation will have an impact on what we do - for example we have new exemption powers - the regulatory fundamentals are constant: help people comply, check to ensure they are complying (focusing where the risk is likely to be greatest), and taking remedial action against non-compliance, particularly deliberate breaches of the Act."

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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