Win for financial advisers as CoFI tweaked
The bill introduces new conduct obligations for financial service providers.
It requires financial institutions to be licensed in respect of their conduct towards consumers, to treat consumers fairly, to establish a fair conduct programme throughout the business and ensure it is complied with and to ensure all those involved in the chain of distribution comply with regulations that prohibit sales incentives based on volume or value targets, like soft commissions such as overseas trips, bonuses for selling a certain number of financial products, leader boards, and performance management based on volume of sales.
There had been concerns that financial advisers would be captured by product providers’ fair conduct programmes, which would have meant they were bound by their own code of conduct, their own financial advice provider’s systems – and potentially multiple product providers’ fair conduct programmes as well.
But the bill has been amended during the select committee process to concentrate on the conduct of financial institutions.
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