All advisers should be bound by the Code of Professional Conduct that applies to authorised financial advisers, it has been claimed.
The Code of Professional Conduct for Authorised Financial Advisers drives the way advisers operate their businesses.
It contains a range of requirements they must abide by. The paramount standard is the requirement to put clients’ interests first.
Professional Advisers Association chairman Bruce Cortesi said it would solve a lot of the problems identified in the industry if all advisers, whether they were AFA, RFA or in a QFE, were bound by the same code.
He said that would remove much of the need to alter the existing adviser designations.
Adviser Liz Koh agreed the code should apply more broadly.
She said questions that have been raised about KiwiSaver sales practices would be efficiently addressed if all QFE advisers were bound by that same “client first” expectations.
“There’s an ethical consideration that should probably be caught up in the Financial Advisers Act review. AFAs are obliged to put clients first and not do anything just to put more money in their own pocket. Anybody giving financial advice needs to put the client first. It’s a really good reason for the Financial Advisers Act to be reviewed.”
At the combined PAA and IFA conference, Code Committee chairman David Ireland also backed the idea of a code for all.
MBIE said respondents to its survey of financial advisers agreed the Code had resulted in advisers focusing on their continuing professional development and increasing their competence and knowledge.
But the respondents agreed or were neutral about the idea that the code had made them more ethical and likely to promote client care.
The issues paper, which forms the basis for submissions on the Financial Advisers Act review asks: Are the minimum ethical standards for AFAs appropriate and have they succeeded in fostering the ethical behaviour of AFAs? Should the same or similar ethical standards apply to all types of financial advisers?