Revised Code back in the Commissioner's hands

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The Code Committee has today submitted a revised draft Code to the Commissioner for Financial Advisers for approval.

Friday, August 20th 2010, 3:53PM 1 Comment

Code Committee chairman Ross Butler says the amendments have been made in three areas in response to directions given by the Commissioner to ensure that the Code is consistent with the Financial Advisers Act 2008. 

The main amendments made by the Committee are:

Firstly, the description of the financial adviser services requiring authorisation as set out in the Background to the Code has been updated to accord with changes to the Act that came into force on 1 July 2010. It now includes detail stating that financial advisersare required to be authorised under the Financial Advisers Act in order to provide a personalised service to a retail client.

Secondly, an explanatory note has been added to Code Standard 5 clarifying both its limited application and the fact that an authorised financial adviser (AFA) may not provide financial advice to a retail client in relation to the acquisition of a financial product that is not able to be lawfully offered to the client.

Thirdly, a note has been added to Code Standard 8 clarifying that where a client has sought personalised advice from an Authorised Financial Adviser, but has opted out of receiving a suitability assessment such that the Adviser ends up providing a class service, the adviser must comply with Code Standard 10.

Butler says assuming that the Code is approved by the Commissioner, and subsequently by the Minister, it is likely that the first advisers will be authorised from 1 December 2010. 

He encourages advisers to take advantage of the many resources provided by the sector and by training providers, to ready themselves for the new regime.

Butler says next week the Committee will also be publishing a paper summarising  major issues considered by the Committee in response to submissions made on the second draft of the Code.

The paper will also reflect the Committee's thinking on the three matters raised by the Commissioner this week.

Butler wishes to thank the members of the Code Committee for the professional contributions they have made to the development of the draft Code.

"I appreciate that they each have other demanding roles, and I acknowledge the personal and corporate sacrifices and investment they have made."

He also wishes to acknowledge the very useful contributions made by consumers, advisers, their companies and professional bodies and by other stakeholders.

He says the Committee appreciates their involvement in the development of the draft Code and their active participation throughout this comprehensive consultation process.

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