Draft code of conduct finally out
The long-awaited draft code of conduct of financial advisers has been released, and has offered some, though not complete, clarity on how insurance products will be classified under the new regime.
Wednesday, March 31st 2010, 5:48PM 
2 Comments
by Paul McBeth
Most of the minimum standards fell into line with expectations after what has been a long consultative period, with the deadline for the draft pushed out several times. Institute of Financial Advisers President Lyn McMorran said the document had not thrown up too many surprises, although she was pleased to see the Code Committee had recognised those financial planners and underwriters who are seeking to achieve more than the minimum standard in the competency standards and prospect of tougher entry requirements in the future.
McMorran said insurance products had been a contentious issue among advisers through much of the process. She said the inclusion of "an insurance product, including a term life insurance policy" under category 2 product's definition was useful, there were still "grey areas."
The Committee is now calling for submissions on the draft code, which close on May 7, before they send a final draft in June to David Mayhew, the Commissioner for Financial Advisers. Mayhew will make a subsequent recommendation to Commerce Minister Simon Power. The new regime is expected to come into effect in December.
Mayhew said he expects advisers to act now in order to meet the code's competency requirements, and from next month, they will be able to book with the ETITO training organisation to have their competence assessed.
"The draft code is the best indication of what the final requirements are likely to be, so advisers who are a long way off that mark should take remedial steps immediately," he said in a statement.
He also said it will help businesses assess whether they will have the capacity to be qualifying financial entities.
McMorran said the Code Committee's consultation process was "pretty good" and confirmed the IFA will be making a submission on the draft code.
Paul is a staff writer for Good Returns based in Wellington.
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Comments from our readers
As for the ETITO assessments - what a waste of time. Several of the questions were contentious, and the categories I felt were inter-mingled in such a way that a clear assessment could not be made. How can an outside body truly gauge the efficiency and effectiveness of a very specialised role, one that clearly not many New Zealanders themselves understand?
I still stand behind my original suggestion that advisers - investment, insurance, mortgage and any others should be authorised by the product providers, and the providers be held responsible.
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