Draft version of revised code released
A controversial proposed KiwiSaver pathway has been all but done away with under the revised Code of Professional conduct, released today.
Thursday, October 3rd 2013, 4:34PM
by Susan Edmunds
After consultation with advisers around the country, a draft version was released today.
Of the changes that had been proposed to the original code, most debate had centred on the proposal to allow registered financial advisers to step up to KiwiSaver advice via a specific qualification.
But in the draft version out today, that provision has been replaced by authorised financial advisers being allowed to advise on KiwiSaver first-home withdrawals without sitting an investment qualification.
The proposed increase in the number of structured professional development hours spread over two years remains, but the definition of structured professional development offers more flexibility. Advisers will have to complete 30 CPD hours over two years, instead of 10 per year.
Standards relating to minimum standards of client care have been restructured.
Committee chairman David Ireland said it was clear that the standards had been causing confusion.
“We’ve recast four of them. One is now purely about the information AFAs have to provide to ensure retail clients are making informed decisions about engaging them, one is about how and when to determine suitability, the third is about the explanations an adviser has to give when providing an investment planning service or financial advice on a category one product, and finally a principles-based adjustment to record keeping obligations to complement the other changes made. We think this will provide a much clearer formulation for what is required.
“We’ve also introduced an express relief from obligations in relation to suitability, for situations where clients are simply instructing an AFA to carry out a transaction for them – for example in the situation where they might want to purchase a particular share and don’t want a full analysis of whether that share is suitable for them.”
He said the draft was still principles-based, which had been important to those who had made submissions.
Comments can be made on the draft until October 24. It must be approved by the FMA before it can be sent to the Minister of Commerce for acceptance. It is expected that the new code will be published early or mid next year.
| « FMA says it will do better with FMCA than AML | Professional bodies 'will have to push harder' on CPD » |
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