A new code of professional conduct, which will apply to all financial advisers including insurance brokers, has been approved by the Minister of Commerce and Consumer Affairs.
The code of conduct was developed by the Financial Advice Code Working Group appointed in mid-2017. It was based on the consultation held with industry, consumers and other interested parties and individuals.
While not yet in force, Commerce and Consumer Affairs Minister Kris Faafoi said finalising a new financial advice code will ensure consumers are at the heart of decision-making when they access financial services.
The code fits within the Financial Services Legislation Amendment Act that was passed in April, while also complementing work underway to provide more protections when consumers use banks and insurance companies.
Faafoi noted that anyone giving financial advice to consumers will need to act fairly and with integrity, and to meet a minimum standard of competence. Businesses that provide financial advice will need to be licensed.
“We want consumers to have confidence that people advising them about their finances are prioritising their interests, are competent and are following professional standards,” the minister added.
The new code of conduct is expected to come into force in mid-2020. Businesses will have at least six months to get a transitional licence, and a further two years to become fully licensed and meet the competency requirements.