New Code of
For Financial Advice Services
The Government has passed new legislation that changes how financial advice is regulated in New Zealand.
This legislation comes into effect in early 2021, and includes a new Code of Professional Conduct for Financial Advice Services.
Anyone providing financial advice to retail clients is subject to the new Code, which has two parts. Part 1 outlines the ethical behaviour, conduct and client care standards that need to be met, while Part 2 outlines the standards of competence, knowledge, and skill required.
The Code describes these Part 2 standards as being equivalent to the general outcomes of the New Zealand Certificate in Financial Services (Level 5) version 2, and provides several ways of demonstrating those standards, including:
- by reference to an individual’s experience and/or an alternative qualification
- by reference to a financial advice provider’s procedures, systems and expertise.
Alternative pathways to demonstrating competency
Skills is developing alternative pathways to assist individuals and organisations wanting to demonstrate competency, knowledge, and skill in an objective, measurable and independently verifiable manner.
Skills will partner with subject matter experts to develop pathways that will give you the ability to demonstrate competence in an objective, measurable and independently verifiable manner.
Individuals seeking to demonstrate that they fulfill the competency requirements of the Code, will have the opportunity to undertake a robust initial self-assessment online with Skills.
Based on the self-assessment individuals will be able to decide if they wish to either:
- Study further, which means:
- Undertake training with an approved provider to achieve the New Zealand Certificate in Financial Services (Level 5) version 2.
- If successful, be awarded the New Zealand Certificate in Financial Services (Level 5) version 2 from the approved provider.
- Proceed with Skills, which means:
- Complete an online Skills Recognition Process, in which they will need to demonstrate achievement of other international or domestic qualifications and/or knowledge, skills and experience.
- If successful, receive a letter from Skills confirming that they have capabilities equivalent to the general qualification outcomes required by the Code. Note that this pathway will not result in the individual being awarded the New Zealand Certificate in Financial Services (Level 5) version 2 qualification.
For Financial Advice Providers
Training is just one component of procedures, systems and expertise.
For financial advice providers (FAP), Skills offers an alignment process that can either fully or partially map the FAP’s own in-house training programmes with the outcomes of the New Zealand Certificate in Financial Services (Level 5) version 2.
Depending on the outcome of the alignment with the FAP, individuals who have completed the in-house training may be awarded the qualification, or a number of the unit standards that make up the qualification. Alternatively, the FAP may receive a report from Skills confirming that the in-house training programme is at the required level, which the FAP can use as part of demonstrating to the Financial Markets Authority (FMA) that they meet competency requirements through their procedures, systems and expertise.
The FMA is the government agency that licenses and supervises financial advice providers and will monitor compliance with the new Code when it comes into effect in early 2021.
For Tertiary Education Organisations
Tertiary education organisations who provide alternative training programmes will also be able to apply to have their training programmes aligned to the outcomes of the New Zealand Certificate in Financial Services (Level 5) version 2 by Skills. If successful, the education organisation will receive a letter from Skills confirming the details of each alternative training programme that is at the required level, which can be used to provide verification to their learners and the FMA.
As part of its response to the COVID-19 pandemic, the Government has now delayed the introduction of the new Code until early 2021. We are however continuing to develop the framework for these alternative pathways and expect to launch the Skills Recognition Process and alignment programmes in 2020.
Keep an eye out here for further updates.