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Code Committee determines baseline standards for financial adviser competency

14 August 2009

Code Committee Releases Consultation Paper on Proposed Minimum Standards of Ethical Behaviour and Client Care for Authorised Financial Advisers

The Financial Advisors Code Committee has released a consultation paper on proposed minimum standards of ethical behaviour and client care. The Code Committee seeks feedback and submissions on this consultation paper by 5pm 18 December 2009. Chairman Ross Butler said that the Committee has proposed an over-arching ethical behaviour standard.

"The first principle is that any authorised financial adviser must place their client's interests first and act with integrity," he said.

The Committee is proposing that financial advice must be independent and objective, unless the adviser clearly communicates the lack of independence and/or objectivity to the client, and puts in place appropriate safeguards. This could include offering the client the opportunity to take independent advice. Ross Butler said that the proposed Code also includes client care standards. "Client care is critical to the delivery of good advice, and we are proposing that advisors must build seven client care principles into the way they work with their clients," he said. These standards are:

  • professionalism;
  • suitability;
  • capability and capacity;
  • effective communication;
  • effective dispute resolution;
  • compliance; and
  • custody.

The consultation paper may be downloaded here. 

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For further information please contact Ross Butler, Code Committee Chairman, ph 021 359 899