Commissioner takes final step, and issues stern warning
The Commissioner for Financial Advisers has taken the last formal step required for the introduction of the new financial advisers regulatory regime by gazetting the Code of Professional Conduct for Authorised Financial Advisers.
Thursday, October 28th 2010, 4:39PM 
12 Comments
Commissioner for Financial Advisers David Mayhew says it is an important milestone for the implementation of the new regime.
"This confirms that Authorised Financial Advisers will be a reality from December 1. From that date advisers giving personalised investment advice to retail clients will be able to operate within the new regime designed to promote the sound and efficient delivery of financial advice and to encourage public confidence in the professionalism and integrity of advisers," he said.
He also noted that from December 1 all financial advisers will be subject to the statutory duties to exercise care, diligence and skill and not to engage in misleading or deceptive conduct.
At the same time, the Securities Commission has approved the standard conditions for incorporation in the authorisation of AFAs. Those conditions provide the framework for the regulatory relationship between the individual AFA and the Securities Commission, for example, in relation to reporting obligations.
Submissions on the proposed standard conditions will be published by the commission shortly.
Mayhew sounded a note of caution about the readiness of the majority of financial advisers to engage with the new regime.
"While the Securities Commission will have in place a licensing process for advisers who want to be AFAs by December 1, too few are currently getting on with the registration and assessment steps necessary for authorisation. There is a real risk that delay now will create a log jam next year," he said.
The Commission has previously said that, provided advisers applied for authorisation by 31 March 2011, the Commission should be able to complete the process by the critical date of 1 July 2011.
"But that assumes significant numbers have already been processed before March 31", Mayhew says. "The experience to date has been disappointing and, unless there is more engagement now, there may be insufficient capacity in the system to cope with the volume of applications to be processed in the last three months before the regime is fully in force."
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Comments from our readers
Advisers are saying No, We are not interested in being an AFA, and I suspect many will not complete the Level 5 Certificate either, choosing just to register.
The Govt has made a complete hash of the whole process from day one, which has upset the majority of Advisers, and caused them alot of frustration, confusion and to lose focus in their work.
Can't blame them for taking the RFA route, as they just want to focus on doing some business.
Maybe if the Govt had put together it's own Code of Conduct together in being Professional, in how it dealt with this issue, there would be a different outcome?
What do you think?
Another thing about the AFA requirement is that it is age discriminatory. For many senior advisers the educational hurdle is just too high for them to jump and they are exiting the industry earlier than they otherwise would, taking a wealth of experience with them, leaving the underserviced NZ insurance market in an even worse state.
The problem is that the people leading this don't know and probably still don't know exactly what we do.
But it sure is a gravy train for all and sundry and all in the name of 'restoring confidence!!! It seems to me that all those who destroyed the confidence have got off scottfree.Bluechip??
Another frustrated adviser.
I have just sold the business- Would have been nice to carry on, but I can afford to retire comfortably and just don't need all this c***.
I am going fishing, so have fun, you lot!
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