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Angus Dale-Jones
The new version contains amendments that the Financial Advice Code Committee consulted on last year, which aim to clarify the competence, knowledge and skill requirements for financial advisers, having regard to the availability and quality of financial advice.
The new version of the Financial Advice Code, takes effect on November 1.
Code Committee chairman Angus Dale-Jones says the new code makes three changes to emphasise the importance of competence.
To give suitable advice, each adviser must assess the adequacy of their competence for the type of advice they give.
“That's no different from the judgement expected of any professional. In some advice circumstances it may mean skilling up beyond minimum competence standards.”
Financial Advice Providers have an existing parallel obligation to take all reasonable steps to ensure their advisers and representatives have appropriate competence.
“The Code now highlights that. Competence is a shared responsibility between the adviser and their FAP.”
Continuing Professional Development is a central part of ensuring that a financial adviser is able to give suitable advice. And that a FAP is discharging its duties in relation to adviser competence.
“The Code changes highlight the broad range of activities that can be included in CPD. Mentoring, especially in an adviser's first year, is a particularly valuable source of CPD. So too is ongoing participation in relevant professional association activities.”
Dale-Jones says in recommending these changes to the minister, “the Committee carefully considered the legislative purposes of ensuring the quality and availability of financial advice.”
“We opted not to impose a higher qualification, such as a degree, for certain types of advice. We will monitor how financial advisers and FAPs respond to the three changes now being made to the code.”
Financial Advice NZ chief executive Nick Hakes says welcomes the changes and says they are “a pragmatic and future-focused update.”
“It strikes the right balance—honouring the expertise of current advisers, establishing a clear pathway for new entrants, and reinforcing public trust in the profession.”
“It’s the shift in Code Standard nine, from “maintain” to “continually develop” competence, knowledge, and skill—that signals a deeper cultural shift,” he says.
“This subtle yet powerful change places lifelong learning at the heart of professional advice,” Hakes says. “It’s not just about meeting minimum standards—it’s about embracing a mindset of continuous growth and relevance.”
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So anyone privy to what “activities” are now deemed an acceptable form of CPD? Also, what’s this comment about “ongoing participation in relevant professional association activities”? Membership of a professional association is not a requirement of the FMA to hold a FAP licence.
As advisers know the current Code doesn’t prescribe the CPD required so logically as an adviser the CPD that you would be focusing your time on is product knowledge of the various providers that you deal with. Everything else is secondary to your role as an adviser. When discussing the subject of continuing professional development as an adviser product knowledge is paramount when providing advice.
The good news is that the insurers (and lenders) do a good job nowadays of letting advisers know about the changes and enhancements that they make to their policy and products, and this information is being communicated to accredited advisers regularly for FREE. Evidencing to a regulator like the FMA that you are abreast of these announcements made by the providers as they happen can be easily shown in a register. I can't think of a better or more appropriate way to demonstrate ongoing professional development as an adviser and it’s costing you nothing but time.
Advisers do not need to be paying money to a group or educator etc. for a course on CPD. This is one of the biggest scams within the industry currently i.e. advisers paying money for CPD courses to professional associations or education companies when they do not need to be.