Consumers trust the people and institutions that provide financial advice, so it is important that financial advice is held to appropriate standards, Commerce and Consumer Affairs Minister Kris Faafoi believes.

Yesterday, Faafoi welcomed the beginning of public consultation on a new code of conduct.

“This is one of a range of significant changes to the regulation of financial advice contained in the Financial Services Legislation Amendment Bill (FSLAB), which is currently before select committee,” he said.

“Under the Bill, all financial advice to everyday clients will have to meet standards of conduct and competency. This is really important because we know that small changes to investments or savings can ultimately make a big difference, for example to funds saved for retirement.

“This really affects people’s ultimate quality of life – so we do want to ensure the advice is as good as it can be to enable the best outcomes.”

Faafoi said he hopes those who give financial advice will get involved to ensure the new code will be manageable both for advisers and consumers.

The Financial Advice Code Working Group was appointed in mid-2017 to develop the new code, alongside the legislative process to introduce the new financial advice regime.

Once the new code of conduct has been approved, businesses will have about nine months to get a transitional licence. Businesses will then have two years to become fully licensed.