by Susan Edmunds
The Financial Markets Authority put out three consultation papers on Friday, looking at DIMS, the issues around providing personalised financial advice to clients who do not need comprehensive financial planning, and client communications and record-keeping.
It comes just a couple of weeks ahead of the Code Committee’s draft consultation on the Code of Professional Conduct, which it has been working on for some months.
Code committee chairman David Ireland said it was a positive thing that the consultation was happening at the same time. Many of the issues in the FMA’s document, such as how advisers can comply with the code while only offering advice on a particular subject matter, are also covered by the committee’s consultation.
He said the committee might tweak its consultation to take into account what has been put forward by the FMA in the guidance notes. He said people would provide feedback to the FMA on how the code was being applied. The FMA could then either take it on board or say it was a regulatory issue that needed to be referred to the committee.
“There is a bit of overlap but we see that as a good thing, the efficiency of two birds with one stone. Rather than a protracted period of consultation, with one from the FMA then another one from the Code Committee… these are similar issues with a similar audience. Hopefully this will focus the minds of advisers.”
Ireland said there were other issues the committee wanted to look at beyond those tackled in the FMA document, such as adjusting the competency requirements in line with proposed changes in the qualifications framework. There were other concerns around CPD. “Have we got these rules working as effectively as they could be, do we need to make adjustments?”
Ireland said the code, written in 2010, needed refreshing on a housekeeping level because it still referred to the Securities Commission. To update that, a full consultation process was required. “If we’re going to adjust it for that, we need to take the opportunity to look at other bits that could be improved. We have to strike a balance between the accessibility of advice and the integrity of the regime.”
Ireland said the committee would also be interested in hearing a consumer perspective. “There’s lots of noise from the advisory industry but very little from consumers.”
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