New code approved
A new version of the Code of Conduct for financial advisers has been signed off by the Commerce Minister. [Copy of Code attached]
Friday, March 28th 2014, 7:31AM 
6 Comments
Commerce Minister Craig Foss has signed off a revised Code of Professional Conduct for Authorised Financial Advisers which all AFAs will have to abide by from May 1,
“The Code which has been developed in consultation with New Zealand financial advisers will continue to restore confidence in the professionalism and integrity of the industry. Improving confidence in our financial markets is part of the Government’s Business Growth Agenda,” Foss says.
“I’m focused on ensuring that Authorised Financial Advisers put the interests of clients first and transparency around managing conflicts of interests,” Foss says in a statement.
The Code of Professional Conduct was revised in 2013 after extensive consultation with industry and consumer groups.
“The revised Code will have a positive impact on the quality of advice offered by Authorised Financial Advisers, while reducing unnecessary compliance costs and improving access to advice,” Foss says.
We have asked the Minister how the revised code reduces compliance cosots and improves access to advice, and will publish his response when we receive it.
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My immediate point was that compliance with the Code isn't enough for advisors to discharge their fiduciary obligations. Removing or negating advisor's fiduciary obligations would have required very specific legislation in the FAA - and its not there (it would have been a very clear indication that the standards being imposed on advisors under the FAA were lower than that already in place). So, notwithstanding the FAA, the position remains, that if advisors don't meet their fiduciary obligations (as well as those under the Code) they will still be liable in a court of law - the consequences of which far exceed the penalties under the Code. Unfortunately, given the lack of guidance and education on the matter, its going to require an advisor to be sued before people listen (although it might come out in the Feltex action).
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