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Code process drags on

Advisers are stuck in a no-man’s land while they wait for more information on the new code of conduct.

Wednesday, March 13th 2019, 6:00AM 1 Comment

Angus Dale-Jones

The Code Working Group’s final draft was submitted to Commerce Minister Kris Faafoi for sign-off on February 28.

But he now has up to three months to consider the code and approve it - and until then, advisers won't find out what it contains.

There will then be another nine months before it comes into force and a two-year transition period for existing advisers to work towards meeting the new competency standards it introduces.

Working group chairman Angus Dale-Jones said the passage of the Financial Services Legislation Amendment Bill (FSLAB) and Faafoi's approval were the two factors that affected when it could release the code.

It is expected to bring in a requirement for advisers to have at least a level five certificate.

It also covers things such as their requirement to treat clients fairly and act in their interests, managing conflicts of interest, suitability of financial advice, and requirements not to bring the industry into disrepute.

Adviser Murray Weatherston, who has been an outspoken commentator on the regulatory changes, said it was hard to see why Faafoi needed the full 90 days he was allocated.

He said his predecessor had turned one around in three days.

Faafoi would not need to wait for FSLAB to pass unless changes were expected to it, he said. There has been no opposition to the bill.

“Every firm that’s contemplating what they are going to do for the future is held in a no man’s land,” Weatherston said, “with no idea what the final outcome is going to be.”

He said the whole process of changing to the new regime had been slow. FSLAB had taken longer than expected to pass, the development of the code had been slow and disclosure regulations were slow to be released.

He said the lack of speed showed the inefficiency of the parliamentary process.

Tags: Code Code Working Group Financial Services Legislation Amendment Bill

« Commissions, scope of advice, convictions among disclosure requirementsFaafoi: We don't want to wreck the system »

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Comments from our readers

On 13 March 2019 at 10:05 am John Milner said:
I for one won’t be sitting on the edge of my chair awaiting the code and legislation. For those that are, perhaps a new hobby is in order. If you haven’t achieved the entry level qualification of level five by now, you have squandered literally years of time and are no doubt waiting to leave the industry or probably should.
I doubt there will be any earth shattering surprises ahead unless you have been in a coma for the past decade so with a yawn and a scratch I get back to serving the people that pay me and what does matter - my clients.

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