News Round Up
Perusing the draft Code of Professional Conduct for Authorised Financial Advisers one marvels that the industry has survived so long without such a cornerstone document.
Whilst one might think the majority of the standards in the code would be implicit in any relationship between a financial adviser and their client the absence of having it spelt out in black and white has been a serious flaw.
Placing clients interests first is Code Standard 1 and must be thought to be self-explanatory as there is little in the way of additional detail relating to this.
Use of the term "independent" is the focus of Code Standard 3 and many advisers currently promoting themselves as independent may find themselves on the wrong side of the examples given.
Definitions of category 1 and category 2 products are spelt out in Section H. If this leaves you with a few question marks then the guidance note issued by the Securities Commission last week is sure to add a few more. You can read that story here.
Disciplinary measures for breaches of the code include cancellation of the AFA's authorisation, debarring for a specified period or payment of a fine. Interestingly no range for fines is spelt out.
Disgruntled clients will also be able to lay complaints directly with the Securities Commission if their adviser breaches the code.
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