Financial Advisers Act 2008

Published by Chris Taylor on October 27, 2010

Are you affected by the recent developments that have occurred in relation to the law for financial advisers?

These developments can be summarised as follows.

The Code of Professional Conduct for Authorised Financial Advisers (the “Code”) was approved by the Minister of Commerce on 21 September 2010. The approved Code is available here.

The Government announced on 22 September 2010 that they will develop regulations to allow insurance advisers and mortgage brokers to become voluntarily authorised under the Financial Advisers Act 2008. Refer here for the relevant Beehive press release.

The commencement dates of the requirement for financial service providers to be registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 were set on 9 August 2010. All financial services providers except for providers of only financial adviser services need to be registered from 1 December 2010. Providers of only financial adviser services need to be registered from 1 April 2011.

As financial advisers will be aware:

  • from 1 July 2011 the provision of certain financial adviser services will be reserved for financial advisers that are authorised (and in some cases, non-authorised advisors employed or nominated by qualifying financial entities or “QFEs”);
  • in order to become authorised, advisers must be able to show that they have attained the Unit Standard Sets (A – E) contained in the National Certificate in Financial Services (Financial Advice) (Level 5) that are relevant to the financial adviser services they provide or hold a recognised alternative qualification or industry designation; and
  • all advisers seeking authorisation must complete Standard Set B which demonstrates knowledge of the Code and other relevant law.

In this regard, ETITO (the industry training organisation responsible for the financial services industry) has announced here that 29 October 2010 is the date by which financial advisers must have registered with ETITO and have made examination and assessment reservations for Standard Set B and Standard Set C (if applicable) in order to complete the authorisation process by 1 July 2011. Otherwise, ETITO has stated that they cannot guarantee access to examinations and assessment in time for the 1 July 2011 authorisation deadline.

The Securities Commission has stated that all financial advisers who wish to become authorised in time for the 1 July 2011 deadline should apply for authorisation by 31 March 2011. The Securities Commission also stated that financial advisers do not need to have completed their competence assessment with ETITO before they apply as the Securities Commission will be able to assess financial advisers’ applications once the minimum competence requirements have been met (ETITO will advise the Securities Commission directly of any assessment results that count towards the competence standards as they come through).

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