Regulation change to broaden and strengthen industry: Dale-Jones

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The chair of the code working group spoke to Good Returns about expectations for the regulation improvements.

Monday, March 15th 2021, 6:00AM 5 Comments

by Daniel Smith

March 15 is a pivotal moment for financial advice. Angus Dale-Jones, chair of the code working group believes that the regulation change will create widespread improvement.

“The whole philosophy of this change in legislation is to lift the game of advisers.

“When MBIE began working through this process they wanted to lift the game in two ways, and that has been central to all of the regulation changes.

“What they are trying to do is:

• improve the availability of financial advice
• and improve the quality of financial advice.

“In everything that we have done in building the code we have focused on those two words, availability and quality. In order to achieve those objectives the legislative removed barriers that had previously existed, and it created in its place one blanket legislation for all different types of advice.

“So the challenge was how do you create a code for a low barrier field, but [one that] doesn’t overdo what people are required to do to comply, but don’t under-do the protections for consumers?”

For Dale-Jones that balancing act has been maintained with three things the adviser needs to consider moving into the new regime.

1. “The first is competence. Everyone who enters the new regime will have gotten through those competence hurdles. But really where I want advisers to focus on in terms of competence is their continued professional development.

2.“The second point is for advisers to look at the standards that are about getting your overall ethical standards and conduct arrangements for your business as a whole working well. It’s not so much thinking about each individual client, but thinking about clients as a whole.

3. “The third point for advisers [is] the client care standards. These are getting the adviser to consider what they should do in every interaction with clients. What we have really tried to do with these standards is focus on tools that advisers can think about to scale what they are doing in different circumstances. The big reminder to people is to explain to your client what you are doing and what you are not doing.”

Dale-Jones believes that the code contains a built in flexibility that allows advisers to get on board with relative ease.

“The flexibility of the code is about shaping what advisers need to do in different advice situations. We tried in every standard, but particularly in the client care standard, to lay down ways in which an adviser can say, ‘Well here is where I can utilise some flexibility’.

“We have said to advisers, ‘Yes you have to comply, but here is your safety net’. As long as advisers are scoping their advice correctly it should be entirely possible to scale your advice to suit every circumstance.”

Dale-Jones views the new regime positively and believes that the code points to a future of strength across the advice industry.

“A big marker for the success of the code is how much the world of financial advice broadens. A good outcome is if we find many more different types of advice impacting different parts of the population. Some of that might be digital, some of that might be person to person.

“This code is trying to recognise to give financial advice you don’t necessarily need a full financial plan. You can have good financial advice in quite a discreet short interaction.

“If the code is being scaled between those moments of full scale advice and small moments of brief interactions, then I think that is a marker of success.”

Tags: Angus Dale-Jones Code Code Working Group regulation

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