Readable Code Needed for Both Consumers and Advisers

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Code Working Group Chair, Angus Dale-Jones, says the Code team are striving to create a Code document that is as readable for the consumer of financial advice as for the financial adviser themselves.

He said making the client care standards easily understood was particularly important so the consumer can read them and know what they can expect from their adviser.

Code Working Group Chair, Angus Dale-Jones

“We want to build on the great work that the existing Code does and see if we can convey some of those concepts in a way that is clear and understandable to consumers as well.

He added: “We’re mindful that the current Code applies directly to about 1800 Authorised Financial Advisers and this Code applies to a much broader spectrum of advice activities…it’s in everybody’s interest that they understand the nature of advice that they can expect in that full range of circumstances.

“So in many ways this needs to be a code for 4.7 million New Zealanders as much as this is a code for whatever number of advisers there ultimately ends up being,” he said.

“…in many ways this needs to be a code for 4.7 million New Zealanders…”

A key concern is that the Code will need to be precise enough so that the adviser knows how to comply and the regulator knows how to enforce the requirements.

“But it needs to be clear enough and written in lay person language to a sufficient enough extent for it to make sense in a non-technical way to a person not expert in financial services,” said Dale-Jones.

“We’re looking for opportunities where we might be able to provide some guidance, examples or signposts to other relevant parts of legislation.

He said they haven’t yet finalised the precise structure but their guiding principle is how to deliver a document that will be useful to both adviser and client.

Because the entity gets a role in the new regime, he said they can also look at how some responsibilities for the entity and how some responsibilities for the adviser can be clarified in a way to minimise unnecessary compliance.