Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698836840103.pdf (New Zealand)
2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Pursuant to section 94 of the Financial Advisers Act 2008, and fol- lowing the preparation of a draft code by the code committee under section 87 of that Act, and the approval of that draft code by the Com- missioner for Financial Advisers under section 88 of that Act and by the Minister of Commerce under section 92 of that Act, the Commis- sioner for Financial Advisers gives the following notice.
1 2 1 Contents Title Date on which Code of Professional Conduct for Authorised Financial Advisers comes into force Schedule Code of Professional Conduct for Authorised Financial Advisers Page 1 2 2 Notice Title This notice is the Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010.
1 cl 2 2 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 Date on which Code of Professional Conduct for Authorised Financial Advisers comes into force All of the provisions of the Code of Professional Conduct for Authorised Financial Advisers set out in the Schedule come into force on 1 December 2010.
Schedule Code of Professional Conduct for Authorised Financial Advisers Contents A Background B Introduction C Minimum standards of ethical behaviour Standard 1 Placing client interests first and acting with integrity Standard 2 Not bringing the financial advisory industry into disrepute Standard 3 Using the term “independent” Standard 4 Borrowing from or lending to a client Standard 5 Restrictions that apply where AFA is related person of product provider D Minimum standards of client care Standard 6 Behaving professionally Standard 7 Ensuring retail clients are able to make informed decisions Standard 8 Suitability of personalised services for retail clients Standard 9 Explaining the basis of personalised services for retail clients Standard 10 Providing class services for retail clients Standard 11 Complaints processes Standard 12 Keeping information about personalised services for retail clients Standard 13 Record retention E Minimum standards of competence, knowledge, and skills 2 cl 2 Page 3 4 5 5 5 6 7 7 8 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule Standard 14 Overarching competence requirement Standard 15 Requirement to have an adequate knowledge of Code, Act, and laws Standard 16 National Certificate in Financial Services (Financial Advice) (Level 5) requirement and alternative qualifications F Minimum standards for continuing professional training Standard 17 Professional development plan requirement Standard 18 Undertaking continuing professional training G Competence Alternatives Schedule H Definitions schedule 14 15 15 16 16 17 18 24 Background A This is the Code of Professional Conduct for Authorised Financial Advisers for the purposes of the Financial Advisers Act 2008.
This section of the Code provides a brief overview of the scope and aims of the Code.

The remainder of the Code contains the operative provisions which must be complied with by all Authorised Financial Advisers.

Financial advisers are required to be authorised under the Financial Advisers Act in order to provide a personalised service to a retail client that is: (a) financial advice or a discretionary investment management service in relation to a category 1 product; or an investment planning service.
(b) Financial advisers may also elect to become authorised under the Act in other situations specified in regulations made under the Act.

As at the date of this Code no such regulations have been made.

The overarching purpose of the Financial Advisers Act is “to promote the sound and efficient delivery of financial adviser and broking ser- vices, and to encourage public confidence in the professionalism and integrity of financial advisers and brokers”.
One of the key ways the Act seeks to achieve its purposes in relation to financial adviser services is by requiring all Authorised Financial Advisers (also referred to as AFAs) to comply with a code which pro- vides for minimum standards of professional conduct.

The overar- 3 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 ching purpose of the Act provides the spirit underpinning the Code.
When considering their conduct and disclosure obligations under the Act and the Code, AFAs should have that spirit in mind.

The Act requires the Code to contain minimum standards of com- petence, knowledge, and skills, of ethical behaviour, and of client care.

The Code is also required to provide for continuing profes- sional training for Authorised Financial Advisers, including specify- ing requirements that an AFA must meet for the purpose of continu- ing professional training.
AFAs may be disciplined for breaches of the Code.

A number of the Code Standards include reference to legal obliga- tions that would apply to AFAs irrespective of the Code requirements.

Such references are included largely for the sake of completeness.

However, the Code does not refer to all legal obligations of AFAs.

AFAs must comply with all applicable laws, whether or not referred to in the Code.
This Code has been approved by the Minister under the Financial Advisers Act and comes into force, either in part or in full, on a date or dates specified by Gazette notice under section 94 of the Act.

The Commissioner may specify different dates for the commencement of different provisions of this Code.
Introduction B Each standard in this Code consists of an overarching principle iden- tified as a Code Standard together with additional provisions that contain further detail about the application of the Code Standard.

Unless otherwise stated, the additional provisions do not limit the application of the overarching principle under which they are stated, or the application of any other Code Standard.
AFAs must apply the Code Standards in a way that encourages public confi- dence in the professionalism and integrity of financial advisers.

Terms used in this Code that appear in italics are defined in the defi- nitions schedule.

This Code does not limit an AFA’s legal obligations, including those under the Act.
4 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule C Minimum standards of ethical behaviour Code Standard 1 An Authorised Financial Adviser must place the interests of the client first, and must act with integrity.

This Code Standard applies to any activity of an AFA that relates to the AFA’s financial adviser services.
What is required to place a client’s interests first for the purposes of this Code Standard is determined by what is reasonable in the circumstances, including any regulatory obligations binding on the AFA in addition to the Code.

An AFA is required to advise a client only in relation to financial products or matters that are within the scope of the AFA’s financial adviser services, as advised to the client in writing.
An AFA is not required to consider or provide financial adviser services in relation to financial products or matters that are not within that scope in order to comply with this Code Standard.

An AFA’s obligation under this Code Standard to place a client’s interests first will not be breached by reporting to the Securities Com- mission any breaches of the Act that the AFA reasonably believes to have occurred.
Code Standard 2 An Authorised Financial Adviser must not do anything or make an omission that would or would be likely to bring the financial advisory industry into disrepute.

This Code Standard prohibits an AFA from conduct that would un- dermine public confidence in the professionalism or integrity of the financial advisory industry.
However, this Code Standard does not prevent an AFA from commenting in good faith on the business, ac- tions, or inactions of any person (including any other financial ad- viser, financial adviser group, financial service provider or industry body) or from exercising the AFA’s reporting powers under section 45A of the Act.
5 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 Code Standard 3 An Authorised Financial Adviser must not state or imply that the Authorised Financial Adviser is independent, or that any financial adviser services provided are independent, if a reasonable person in the position of a client would consider that the Authorised Fi- nancial Adviser or the services provided are not independent.
The following are examples of circumstances where neither the AFA nor the AFA’s provision of financial adviser services may be described as “independent”: (a) a related person of the AFA, or a related person of the AFA’s employer, or principal, is the product provider of a financial product relevant to the financial adviser service provided; or the AFA is subject to a contractual obligation to: • recommend a particular financial product or financial products; or limit the AFA’s recommendations or discretionary in- vestment management services to a particular financial product or financial products; or attain or maintain a target in relation to a particular fi- nancial product or financial products.
• • However, the contractual obligations falling within this para- graph (b) do not include the use of wrap account services, plat- forms, or other portfolio administrative or custodial services, where the use of such services and the arrangements the AFA is able to put in place for the AFA’s clients permit access to a wide range of financial products and product providers; or the AFA or a related person of the AFA will or may directly or indirectly receive a benefit from a person other than the client for providing the services or from the client’s acquisition of a financial product or products.
However, for the purposes of this paragraph (c) the following benefits do not affect an AFA’s ability to describe the AFA or the AFA’s services as independent: • those that are paid, credited, or transferred to the client; and those that are remote or insignificant; and those that are received by the AFA in the form of salary or wages as an employee, or in the form of fees as a (b) (c) • • 6 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule contractor, that are not determined in whole or in part by reference to volume or other targets relating to a par- ticular financial product or product provider.
An AFA must not state or imply that a researcher or other third party service provider used by the AFA in relation to the AFA’s financial ad- viser services is independent unless the AFA has reasonable grounds to believe the third party would be able to describe themselves as in- dependent under this Code Standard, if the third party were an AFA.

Code Standard 4 An Authorised Financial Adviser must not borrow from or lend to a retail client.
This Code Standard does not apply if the client is (a) (b) a related person of the AFA; or in the business of borrowing or lending money or valuable property and the AFA’s borrowing or lending is in the ordinary course of the client’s business on terms consistent with the client’s normal business terms.
This Code Standard does not prevent an AFA or an AFA’s employer or principal from entering into financial arrangements on behalf of a client as the client’s agent to meet settlement obligations in relation to any financial product.

An AFA must not arrange for the AFA’s employer or principal to bor- row from or lend to a retail client, other than in the ordinary course of the employer’s or principal’s business.
Code Standard 5 An Authorised Financial Adviser must not provide financial ad- vice to a retail client in relation to a financial product that is not offered to the public if the Authorised Financial Adviser is a related person of the product provider of that financial product.
This Code Standard does not apply: (a) if the client is a related person of the AFA, or is a related person of the AFA’s employer or principal; or if the AFA is satisfied on reasonable grounds that the AFA’s financial advice is appropriate for the client and, before the client makes a decision in relation to the financial product to (b) 7 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 which the financial advice relates, the AFA provides to the client in writing: (i) an explanation of the AFA’s relationship with the prod- uct provider of the financial product, the risks of the financial product, and details of how the AFA manages any conflict of interest arising as a result of that rela- tionship; and a recommendation that the client takes financial advice from another AFA who is not a related person of the product provider.
(ii) The purpose of this Code Standard is to protect the interests of retail clients in the rare situations where a retail client may hold, or law- fully be offered the opportunity to acquire, a financial product that is not offered to the public.

Accordingly, this Code Standard is very limited in its application.

It does not enable an AFA to provide finan- cial advice to a retail client in relation to the acquisition of a financial product that is not able to be lawfully offered to the client.
D Minimum standards of client care Code Standard 6 An Authorised Financial Adviser must behave professionally in all dealings with a client, and communicate clearly, concisely, and effectively.
When providing financial adviser services to a client, an AFA must: provide only services that the AFA has the competence, know- (a) ledge, and skill to provide; and provide the services and perform the AFA’s obligations in a timely way; and transparently manage any conflicts of interest that may arise in providing the services; and (b) (c) (d) make recommendations only in relation to financial products that have been analysed by the AFA to a level that provides a reasonable basis for any such recommendation, or analysed by another person upon whose analysis it is reasonable, in all the circumstances, for the AFA to rely.
8 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule Communicating “effectively” for the purposes of this Code Stand- ard requires an AFA to take reasonable steps to ensure the client understands the communication.
When transmitting the financial advice of another person to a client, an AFA must take reasonable care to ensure that the person providing the financial advice has an appropriate level of competence, know- ledge, and skill to provide that advice, and either: • ensure the client is aware that the AFA has not prepared the financial advice or assessed its suitability for the client; or accompany the financial advice with the AFA’s own financial advice in relation to the same subject matter (in which case the AFA may have further obligations under Code Standards 8 and 9).
• When providing financial adviser services to a wholesale client, an AFA must take reasonable steps to ensure the client is aware that the client is regarded as a wholesale client for the purposes of the Act and the Code, and also is aware of the consequences of that status.
Code Standard 7 An Authorised Financial Adviser must ensure each retail client has sufficient information to enable the client to make an in- formed decision about whether to use the Authorised Financial Adviser’s financial adviser services and/or to follow any financial advice provided by the Authorised Financial Adviser.
The information an AFA may be required to provide a retail client under this Code Standard includes (but is not limited to) information about any limits on the scope of the AFA’s financial adviser services, the AFA’s qualifications to provide those services, the fees the client must pay, the benefits the AFA or any related person of the AFA will or may receive, and any conflicts of interest the AFA may have, in relation to the AFA’s financial adviser services provided to the client.
In many circumstances an AFA will satisfy the requirements of this Code Standard by complying with the AFA’s disclosure obligations under the Act.

However, in some circumstances additional informa- tion may need to be provided to a retail client to ensure the client has sufficient information to be able to make an informed decision.
9 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 The information required under this Code Standard must be updated when there is any change in the AFA’s circumstances that is material to the financial adviser services provided by the AFA to the client.
Code Standard 8 When providing a personalised service to a retail client an Author- ised Financial Adviser must take reasonable steps to ensure that the personalised service is suitable for the client.

An AFA is only required to determine suitability under this Code Standard based on the information provided by the client and in- formation otherwise known to the AFA.
However, an AFA must make reasonable enquiries to ensure the AFA has an up-to-date understand- ing of the client’s financial situation, financial needs, financial goals, and tolerance for risk, having regard to the nature of the personalised service being provided.
Where a client: (a) declines to provide some or all of the information required under this Code Standard, an AFA must take reasonable steps to ensure the client is aware that the personalised service is limited and specify those limitations; or instructs an AFA (or an AFA’s employer or principal) not to determine the suitability of the financial adviser service pro- vided, the AFA is relieved from the obligation to determine suitability to the extent provided for in that instruction.
How- ever, this relief is only available if the instruction is provided in a document that is signed and dated by the client, and that includes a clear acknowledgement from the client as to the ad- vantages of the AFA determining suitability based on the pro- vision of all the information contemplated under this Code Standard.
(b) An AFA must not direct or influence a client to instruct the AFA not to determine the suitability of a financial adviser service to be provided for the client, or direct or influence a client to decline to provide any of the information contemplated under this Code Standard.
How- ever, this restriction does not prevent an AFA: • drawing the client’s attention to the client’s ability to opt out of having suitability determined as contemplated under this Code Standard; or 10 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule • quoting or estimating a reasonable fee for determining suit- ability under this Code Standard.
If the extent of an instruction given by a client under paragraph (b) of this Code Standard is such that the financial adviser service pro- vided by the AFA to the client is not or will no longer be a person- alised service, the AFA will then need to comply with Code Standard 10.
Code Standard 9 Where an Authorised Financial Adviser provides a personalised service to a retail client that is an investment planning service or that relates to a category 1 product, the Authorised Financial Ad- viser must provide a written explanation to the client of the basis on which those services are provided.
The Authorised Financial Adviser must also take reasonable steps to ensure the client is aware of the principal benefits and risks involved in following any financial advice provided as part of that service, having re- gard to the characteristics of the personalised service.

All explanations required under this Code Standard must be pro- vided to the client at the time the personalised service is provided or as soon as practicable after that time.
However, the requirement to provide an explanation under this Code Standard does not apply where: • the AFA has previously provided the client with an explanation under this Code Standard that is sufficient to cover the per- sonalised service provided; or the client has either instructed the AFA (or the AFA’s employer or principal) or confirmed a prior instruction that an explan- ation under this Code Standard is not required.
Any such instruction or confirmation need not be in writing, but must re- flect an unambiguous, active instruction or confirmation that is relevant to the personalised service currently being provided.

The extent of any explanation required under this Code Standard is determined by what a retail client would reasonably require for the purpose of deciding whether to follow any advice or guidance provided by the AFA.
• 11 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 An AFA must not direct or influence a client to decline the explanation contemplated under this Code Standard.
However, this restriction does not prevent an AFA from: • drawing the client’s attention to the client’s ability to opt out of receiving the explanation contemplated under this Code Standard; or quoting or estimating a reasonable fee for providing an explan- ation under this Code Standard.

• Code Standard 10 When providing a class service to a retail client, an Authorised Financial Adviser must take reasonable steps to ensure the client is aware of the limitations of the service provided.
Code Standard 11 An Authorised Financial Adviser must ensure there is an appro- priate internal process in place for resolving client complaints in relation to the Authorised Financial Adviser’s financial adviser services.
The complaint resolution process under this Code Standard must ensure that: (a) the client is, as soon as reasonably practicable after making a complaint, provided with acknowledgement of the complaint, information about the AFA’s internal complaints handling process, and how to complain to the Securities Commission and to any applicable external dispute resolution scheme; and a register is kept recording all complaints, and action taken towards resolving those complaints.
(b) The complaints resolution process required under this Code Stand- ard is required in addition to the AFA’s external dispute resolution scheme (if any).

Code Standard 12 An Authorised Financial Adviser must record in writing adequate information about any personalised services provided to a retail client.
12 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule The information required to be recorded under this Code Standard in relation to each retail client must include: (a) information about: (i) (ii) (iii) any personalised service provided or any financial product recommended to the client; and any required explanation, and advice as to suitability, given to the client in relation to a financial adviser ser- vice or financial product; and the results of any enquiry or any oral confirmation from the client declining an explanation or suitability assess- ment under Code Standards 8 and 9; and (b) copies of all information and documents provided to the client in writing, or received from the client, in connection with the AFA’s personalised services including— (i) (ii) (iii) any information provided under Code Standard 7; and any provision or confirmation of financial advice; and any explanation provided in accordance with Code Standard 9; and any instructions from the client declining to provide information or declining an explanation under Code Standards 8 or 9; and any instructions from the client declining or acknow- ledging any limitations of a suitability analysis in ac- cordance with Code Standard 8; and details of any complaint received in relation to the AFA’s services.
(iv) (v) (vi) An AFA who is an employee may satisfy the AFA’s obligations under this Code Standard by taking reasonable steps to ensure that rele- vant measures taken by the AFA’s employer are consistent with the measures contemplated under this Code Standard.

An AFA must comply with all obligations under the Privacy Act 1993.
Without limitation, this includes obligations in relation to the use and disclosure of clients’ personal information and the protection of that information from loss and unauthorised access, use, modification, or disclosure.

13 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 Code Standard 13 An Authorised Financial Adviser must ensure that records of all information and documents required under this Code are kept for a minimum of 7 years.
The 7-year minimum period required under this Code Standard gen- erally commences on the last date that the AFA provides a financial adviser service to the client.

However, for information relating to a financial product transaction entered into by the client, the 7-year minimum period for that information commences on the date that all benefits potentially available to the client from the financial prod- uct have been realised, if that date is earlier than the date that would otherwise apply.
The records required under this Code Standard may be kept in elec- tronic form, provided the records are readily retrievable.

An AFA who is an employee may satisfy the AFA’s obligations under this Code Standard by taking reasonable steps to ensure that rele- vant measures taken by the AFA’s employer (or the AFA’s previous employer, where applicable) are consistent with the measures con- templated under this Code Standard.
Where an AFA transfers the AFA’s financial advisory relationship with a client to another financial adviser, the AFA may satisfy the AFA’s obligations under this Code Standard by taking reasonable steps to ensure that the other financial adviser keeps the records contemplated under this Code Standard for at least as long as the AFA would other- wise have been required to keep them.
E Minimum standards of competence, knowledge, and skills required to provide financial adviser services Code Standard 14 Before providing a financial adviser service, an Authorised Finan- cial Adviser must have the competence, knowledge, and skills to provide that service.

This Code Standard 14 applies in addition to the requirements of Code Standards 15 and 16 that relate to particular qualifications an AFA must attain.
14 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule An AFA must be able to demonstrate that the AFA has a reasonable basis for believing that the AFA has the level of competence, know- ledge, and skills required by this Code Standard.
Code Standard 15 An Authorised Financial Adviser must have a knowledge of the Act, the Code, and other legal obligations relevant to the oper- ation of the Authorised Financial Adviser’s practice as a financial adviser (including relevant consumer protection laws), that is ad- equate for the proper operation of that practice.

An AFA must attain Unit Standard Set B and be able to demonstrate the adequacy of the AFA’s knowledge of relevant legislative obliga- tions.
Code Standard 16 To be an Authorised Financial Adviser, a financial adviser must attain the Unit Standard Sets within the National Certificate in Financial Services (Financial Advice) (Level 5) that are relevant to the financial adviser services provided by the AFA.
For the purposes of the Code, an Authorised Financial Adviser is deemed to have attained a particular Unit Standard Set where the Authorised Financial Adviser has attained an alternative qualifi- cation or designation to that Unit Standard Set specified in the Code’s Competence Alternatives Schedule.
An AFA who has attained Unit Standard Sets A, B, C, and D of the National Certificate in Financial Services (Financial Advice) (Level 5) is not restricted in the range of financial adviser services the AFA can provide or offer to provide, subject to Code Standard 14 and the terms of the AFA’s authorisation under the Act.
However, provided the AFA satisfies Code Standard 14 an AFA: (a) may provide a class service for any client, and any form of financial adviser service for a wholesale client, without having attained Unit Standard Set C or Unit Standard Set D; and (b) may provide a discretionary investment management service for a client without having attained Unit Standard Set C; and (c) may provide financial adviser services for a client without having attained Unit Standard Set D if the AFA has attained Unit Standard Set E and the financial products that might be 15 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 included within the scope of the financial adviser services pro- vided for the client concerned do not include any category 1 products.
If an AFA has attained Unit Standard Set D this Code Standard does not also require the AFA to attain Unit Standard Set E in order to pro- vide financial adviser services that involve category 2 products, so long as the AFA satisfies Code Standard 14.
For the purposes of this Code Standard, an AFA will be deemed to have attained Unit Stand- ard Set E if the AFA has either passed both of the residential property lending units (units 26286 and 26287), or the AFA has passed unit 25644 and at least one of units 25645, 25646, or 25647 (being units relating to insurance).
Competence Alternatives Schedule For the purposes of the Competence Alternatives Schedule: • a designation previously attained that has not been retained at the time an AFA seeks authorisation will still be recognised for the purposes of the Schedule, provided the AFA has com- pleted at least 20 hours CPD in the 12 months immediately before first becoming authorised, including at least 10 hours of structured training as described in Code Standard 18; and references to a qualification paper or designation being “sub- ject to the eligibility sunset” mean the relevant qualification, paper, or designation must be fully attained at the time the AFA seeks authorisation for the first time, and the qualifica- tion, paper, or designation will only be recognised for author- isations that come into effect prior to 1 January 2014.
• F Minimum standards for continuing professional training Code Standard 17 An Authorised Financial Adviser must maintain and keep current a professional development plan for each CPD period.
An AFA’s professional development plan must: (a) identify any areas for improvement in the AFA’s competence, knowledge, and skills in relation to the financial adviser ser- vices he or she provides or intends to provide; 16 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule (b) (c) include the AFA’s proposals for making those improvements; and where available, include details of courses, seminars, work- shops, and any other training or professional development planned to be undertaken.
Code Standard 18 An Authorised Financial Adviser must undertake sufficient con- tinuing professional training to maintain the Authorised Finan- cial Adviser’s competence at a level appropriate for the financial adviser services the Authorised Financial Adviser provides or in- tends to provide, and keep up to date with developments relevant to the Authorised Financial Adviser’s practice.
An AFA must in each CPD period complete a minimum of 20 hours of professional development relevant to the financial adviser services the AFA provides or intends to provide.

That professional development must, in each CPD period, comprise at least 10 hours of structured training.
To be structured training, the training must form part of the require- ments for a qualification on either the National Qualifications Frame- work or the national register of quality assured qualifications, or be part of a structured continuing professional development programme managed by a DAO, QFE, or professional body.

An AFA must keep appropriate records of any CPD activity com- pleted that is required by this Code Standard in a form suitable for demonstrating compliance with this Code Standard.
The records contemplated under this Code Standard include: the name of the CPD activity; and (a) the date of completion; and (b) how many hours of CPD it involved; and (c) a brief description of the CPD content covered by it; and (d) whether it constituted structured training; and (e) in relation to structured training, relevant third-party verifica- (f) tion of the successful completion of that training, such as con- firmation by the training provider or by the AFA’s employer or principal.
17 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 Competence Alternatives Schedule G For the purposes of the Code, a person wishing to be an AFA is treated as having satisfied the requirements of a particular Unit Standard Set where the person has attained an alternative qualification or designa- tion as specified in this Schedule.
References in this Schedule to a qualification, paper, or designa- tion being “attained” or “subject to the eligibility sunset” are ex- plained under the “Competence Alternatives Schedule” heading in Code Standard 16.
18 Alternative qualification For the purposes of the Code, a person who has attained one of the following qualifications is treated as having satisfied the requirements of the specified Unit Standard Set Alternative designation For the purposes of the Code, a person who has attained one of the following designations is treated as having satisfied the requirements of the specified Unit Standard Set National Certificate in Financial Ser- vices (Financial Advice) (Level 5) Unit Standard Sets Unit Standard Set A (Comprising units 24755, 25642, and 25643) Knowledge of the industry, financial markets, the advice process and prod- ucts 1 9 • • • • • • Any New Zealand-issued tertiary quali- fication at degree level or above in or majoring in accountancy, business (in- cluding business administration and business analysis), commerce, eco- nomics, finance, or management studies (including applied management) Graduate Diploma in Business Studies (Personal Financial Planning) (Massey University)* Graduate Diploma in Business Studies (Personal Risk Management) (Massey University)* Postgraduate Diploma in Personal Fi- nancial Planning (Waikato University)* Certificate in Financial Services from Adviserlink Learning Limited New Zealand Stock Exchange Diploma (NZSE Diploma) NZX Diploma • *in each case, including their respective prede- cessor diploma qualifications • • • • • • • • • • Associate Financial Planner Associate Life Underwriter Certified Financial Planner CFA Charterholders Chartered Life Underwriter Member of the
 New Zealand Institute of Chartered Accountants (Accounting Technician, Associate Chartered Ac- countant, and Chartered Accountant) NZFMA Accredited individual NZX Advisor NZX Associate Advisor Registered Legal Executive 2 0 1 0 / 3 8 4 A d v i s e r s ) ( C o d e o f P r o f e s s i o n a l S c h e d u l e 2 0 National Certificate in Financial Ser- vices (Financial Advice) (Level 5) Unit Standard
 Sets Alternative qualification For the purposes of the Code, a person who has attained one of the following qualifications is treated as having satisfied the requirements of the specified Unit Standard Set Alternative designation For the purposes of the Code, a person who has attained one of the following designations is treated as having satisfied the requirements of the specified Unit Standard Set Unit Standard Set B (Comprising unit 26360) Knowledge of the Code and consumer protection laws Unit Standard Set C (Comprising units 25650, 25651, 25652, and 25653) Professional practice advice process and complying with legislation No recognised alternative No recognised alternative • Certificate in Financial Services from Adviserlink Learning Limited, attained prior to 1 January 2010 Associate Chartered Accountant Chartered Accountant Certified Financial Planner CFA Charterholder Chartered Life Underwriter NZX Advisor • • • • • • in each case subject to the eligibility sunset S c h e d u l e A d v i s e r s ) ( C o d e o f P r o f e s s i o n a l 2 0 1 0 / 3 8 4 National Certificate in Financial Ser- vices (Financial Advice) (Level 5) Unit Standard Sets Unit Standard Set D (Comprising units 25648 and 25649) Investment Unit Standards Alternative qualification For the purposes of the Code, a person who has attained one of the following qualifications is
 treated as having satisfied the requirements of the specified Unit Standard Set Alternative designation For the purposes of the Code, a person who has attained one of the following designations is treated as having satisfied the requirements of the specified Unit Standard Set • CFA Charterholder • • • • Graduate Diploma in Business Studies (Personal Financial Planning) (Massey University)*, subject to the eligibility sunset Postgraduate Diploma in Personal Financial Planning (Waikato Univer- sity)*, subject to
 the eligibility sunset New Zealand Stock Exchange Diploma (NZSE Diploma) NZX Diploma, subject to the eligibility sunset *in each case, including their respective prede- cessor diploma qualifications 2 1 2 0 1 0 / 3 8 4 A d v i s e r s ) ( C o d e o f P r o f e s s i o n a l S c h e d u l e 2 2 National Certificate in Financial Ser- vices (Financial Advice) (Level 5) Unit Standard Sets Alternative qualification For the purposes of the Code, a person who has attained one of the following qualifications is treated as having satisfied the requirements of the specified Unit Standard Set Alternative designation For the purposes of the Code, a person who has attained one of the following designations is treated as having satisfied the requirements of the specified Unit Standard Set Unit Standard Set E (Comprising either units 25644 and 25645, or units 25646 and 25647) Insurance Unit Standards OR Residential Property Lending Unit Standards • Graduate Diploma in Business Stud- ies (Personal Risk Management OR Personal Financial Planning) (Massey University)*, provided the Diploma includes a paper on personal risk man- agement, subject to the eligibility sunset *in each case, including their respective prede- cessor diploma qualifications • • • Associate Life Underwriter or Char- tered Life Underwriter who has com- pleted four papers from the Graduate Diploma in
 Business Studies (Personal Risk Management) (Massey Univer- sity)* including a paper on personal risk management, subject to the eligibility sunset Associate Financial Planner or Certified Financial Planner who has completed four papers from the Graduate Diploma in Business Studies (Personal Financial Planning) (Massey University)* includ- ing a paper on personal risk manage- ment, subject to the eligibility sunset Chartered Life Underwriter who, prior to 1 January 2010, has attained the New Zealand Diploma in
 Life Assurance, the New Zealand Certificate in Life Insur- ance (Open Polytechnic), an Associate- ship of the Insurance Institute of New S c h e d u l e A d v i s e r s ) ( C o d e o f P r o f e s s i o n a l 2 0 1 0 / 3 8 4 National Certificate in Financial Ser- vices (Financial Advice) (Level 5) Unit Standard Sets Alternative qualification For the purposes of the Code, a person who has attained one of the following qualifications is treated as having satisfied the requirements of the specified Unit Standard Set Alternative designation For the purposes of the Code, a person who has attained one of the following designations is treated as having satisfied the requirements of the specified Unit Standard Set Zealand (Life), or has completed the per- sonal risk management course provided by Adviserlink Learning Limited *in each case, including their respective prede- cessor diploma qualifications 2 3 2 0 1 0 / 3 8 4 A d v i s e r s ) ( C o d e o f P r o f e s s i o n a l S c h e d u l e Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 Definitions schedule H In this Code, unless the context otherwise requires, the following terms have the meanings set out below.
To assist, those terms are shown in italics wherever they appear in the body of the Code.

Any term that is not defined in this Schedule, but is defined in the Act or in regulations made under the Act, has the same meaning in the Code as in the Act or in those regulations, as applicable.
Accounting Technician Act AFA Associate Chartered Account- ant Associate Financial Planner Associate Life Underwriter Authorised Financial Adviser Bank benefit business partner a member of the New Zealand Institute of Char- tered Accountants who, under the rules of the Institute, is entitled to use the designation ac- counting technician the Financial Advisers Act 2008 an Authorised Financial Adviser a member of the New Zealand Institute of Char- tered Accountants who, under the rules of the Institute, is entitled to use the designation As- sociate Chartered Accountant an individual who has been awarded this des- ignation by the Institute of Financial Advisers Inc an individual who has been awarded this des- ignation by the Institute of Financial Advisers Inc a person described in section 51 of the Act who is authorised by the Securities Commis- sion under section 55 of the Act has the same meaning as the term “bank in New Zealand” in section 5 of the Act any money, property, or other valuable consid- eration a person who is a member of a partnership as defined in section 4 of the Partnership Act 1908 24 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule category 1 product category 2 product means any of the following products (other than a product that is a category 2 product): (a) (b) a security; or a land investment product (as defined by regulations); or a futures contract; or an investment-linked contract of insur- ance (as defined by
 regulations); or any other product specified by regula- tions made under the Act; or a renewal or variation of the terms or conditions of an existing category 1 product (c) (d) (e) (f) (h) (g) means any of the following products: a bank term deposit; or (a) any bonus bond; or (b) any call building society share; or (c) a call credit union share; or (d) a call debt security; or (e) a share in a co-operative company (as (f) defined in section 2(1) of the Co-opera- tive Companies Act 1996); or a unit in a cash or term
 portfolio invest- ment entity (as defined by regulations); or a consumer credit contract within the meaning of the Credit Contracts and Consumer Finance Act 2003; or a contract of insurance (other than an investment-linked contract of insur- ance); or a life insurance policy (within the meaning of section 2(1) of the Secur- ities Act 1978) issued before 1 January 2009; or any other product specified by regula- tions made under the Act; or a renewal or variation of the terms and conditions of any existing category 2 product (k) (j) (i) (l) Certified Financial Planner CFA Charterholder Chartered Accountant an individual who has been awarded this des- ignation by the Institute of Financial Advisers Inc. an individual entitled to use the chartered finan- cial analyst designation granted by the CFA In- stitute has the same meaning as in section 2 of the New Zealand Institute of Chartered Accountants Act 1996 25 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 means an individual who has been awarded this designation by the Institute of Financial Advis- ers Inc. a financial adviser service that is not a person- alised service means, in relation to an AFA,— (a) a person who receives a service from the AFA (whether or not on payment of a charge); but does not include a person who receives any services from the AFA if the service is both provided and received in the course of, and for the purposes of: (i)
 (ii) the same business; or the businesses of related bodies corporate; or the businesses of members of a QFE group, (iii) (b) irrespective of whether the person pro- viding or receiving the service is the person carrying on the business, a con- trolling owner, a director, an agent, or any other person information about a client the Code of Professional Conduct for Author- ised Financial Advisers approved by the Min- ister and brought into force by Gazette notice under section 94 of the Act a standard
 specified in the Code the person appointed under section 79(3) of the Act the schedule of this Code named as such an expression of dissatisfaction by a client to an AFA about the AFA’s financial adviser services provided to the client, other than an expression of dissatisfaction that is trivial or vexatious or that the client indicates is not intended to con- stitute a complaint for the purposes of the Code continuing professional development or train- ing relevant to the financial adviser services the AFA provides or intends to provide Chartered Life Underwriter class service client client information Code Code Standard for Financial Commissioner Advisers and Commissioner Competence Schedule complaint Alternatives CPD 26 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule 2010/384 CPD period DAO director discretionary investment man- agement service eligibility sunset ETITO external scheme dispute resolution financial advice in respect of an AFA, a 12-month period from the day of the year specified for this purpose in the AFA’s terms of authorisation or, in the ab- sence of any such day being specified, a calen- dar year with the first such period commencing on the 1st day of January following the AFA’s authorisation an entity registered by ETITO as a delegated as- sessment organisation accredited for the provi- sion of training and assessment for Unit Stand- ard Set C has the meaning given by section 126 of the Companies Act 1993, but also includes, in re- lation to a body that is not a company, a person who occupies a position comparable to that of a director (such as a trustee or a partner) a service which an AFA, acting under an au- thority granted to the AFA (or to the AFA’s em- ployer or principal) manages all or some of the client’s holdings of financial product, and de- cides which financial products to acquire or dis- pose of on behalf of the client part of the transitional measures explained at Code
 Standard 16 under the “Competence Al- ternatives Schedule” heading Electrotechnology Industry Training Organisa- tion Incorporated in respect of an AFA, the scheme under section 48 of the Financial Service Providers (Registra- tion and Dispute Resolution) Act 2008 to which any complaint concerning the AFA must be re- ferred making a recommendation or giving an opinion in relation to acquiring or disposing of (includ- ing refraining from acquiring or disposing of) a financial product, noting that whether or not advice is financial advice is not affected by how the advice is given or communicated.
The mere provision of information or making a recommendation or giving an opinion relat- ing to a class of financial products, or making a recommendation or giving an opinion about the procedure for acquiring or disposing of a financial product, or transmitting the financial advice of another or recommending that a per- son consult a financial adviser, does not amount to financial advice 27 Schedule Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 financial adviser financial adviser service financial product internal complaints handling process investment planning service a person who provides a financial adviser ser- vice giving financial advice, or providing an invest- ment planning service, or providing a discre- tionary investment management service, in the ordinary course of business a category 1 product or a category 2 product an AFA’s internal process for handling and resolving complaints as described in Code Standard 11 a service provided by an AFA under which the AFA designs, or offers to design, a plan for an individual that: (a) is based on, or purports to be based on, an analysis of the individual’s cur- rent and future overall financial situ- ation (which must include his or her investment needs) and identification of the individual’s investment goals; and includes 1 or more recommendations or opinions on how to realise those goals (or 1 or more of them), (b) Minister NZFMA Accredited individual NZX Advisor and NZX Associ- ate Advisor regardless of whether the analysis and identifi- cation is of the individual’s particular financial situation and goals or of the financial situations and goals attributable to a class of persons that the individual is identified as coming within has the same meaning as in section 5 of the Act an individual who has achieved accredited in- dividual status following the completion of the New Zealand Financial Markets Association Financial Services Accreditation Program an individual who has been accredited and ap-
 proved by NZX as an NZX Advisor or NZX Associate Advisor (as applicable) as provided in the NZX Participant Rules 28 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Schedule offered to the public person personalised service in relation to a security, has the same meaning as the construction of references to offering se- curities to the public in section 3 of the Secur- ities Act 1978; and in relation to any other financial product means the financial product is being or has been of- fered to: (a) any section of the public, however se- lected; or individual members of the public se- lected at random; or a person if the person became known to the offeror as a result of any public advertising of the offeror that was in- tended to likely to result in the public seeking further information about the financial product (b) (c) includes an individual, a corporation sole, a body corporate, and an unincorporated body (including the trustees of a trust) a financial adviser service: (a) given to or in respect of a named client or a client that is otherwise readily iden- tifiable by the AFA; and the AFA has taken into account the client’s particular financial situation or goals (or any one or more of them) in providing the service, or the client would, in the circumstances in which the service is provided, reasonably ex- pect the AFA to take into account the client’s particular financial situation or goals (or one or any
 more of them), (b) however, a service is not personalised merely because the client comes within a class of per- sons having predefined characteristics and the AFA takes the fact that the client comes within that class into account a person who is the principal in an agency re- lationship principal 29 Schedule product provider Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 means: (a) (b) (c) (d) the issuer, in the case of a security: the creditor, in
 the case of a consumer credit contract (within the meaning of the Credit Contracts and Consumer Fi- nance Act 2003): the insurer, in the case of a contract of insurance (other than an investment- linked contract of insurance): the person specified by regulations in any other case professional body QFE Registered Legal Executive related person a membership-based organisation whose prin- cipal activities are associated with the finan- cial services industry in New Zealand where ongoing membership requires compliance with continuing professional development or train- ing requirements specified by the organisation an entity that is registered and has QFE status or a number of partner entities that are each registered and jointly have QFE status an individual who is entitled, under the Rules of the New Zealand Institute of Legal Execu- tives Inc, to use the designation registered legal executive (a) in relation to an individual, a parent, child, sibling, spouse, de facto spouse, civil union partner, employer, or busi- ness partner of that individual, or a principal on whose behalf the indi- vidual provides financial adviser ser- vices by way of a contract for services; and in relation to a body corporate A: (i) (b) a person who • • is also a body corpo- rate; and either has substantially the same shareholders as A; or is under the control of the same person or per- sons as A; or a person who is able, directly or indirectly, to— • • exercise, or control the exercise, of 25% or more of the voting at a meeting of the share- holders of A; or (ii) 30 2010/384 Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 Explanatory note retail client security unit Unit Standard Set wholesale client written or in writing • appoint or control 25% or more of a governing body of A a client who is not a wholesale client has the same meaning as in section 5 of the Act a unit standard forming part of the National Certificate in Financial Services
 (Financial Ad- vice) (Level 5) on the National Qualifications Framework a set of units specified in the National Certifi- cate in Financial Services (Financial Advice) Level 5, with Unit Standard Sets A, B, C, D and E comprising the respective units specified in the Competence Schedule a client classified as a wholesale client under section 5C of the Act includes in electronic form.
Dated at Wellington this 22nd day of October 2010.

David Mayhew, Commissioner for Financial Advisers.

Explanatory note This note is not part of the notice, but is intended to indicate its gen- eral effect.
This notice, which is given by the Commissioner for Financial Ad- visers (the Commissioner), gives the notice required by section 94 of the Financial Advisers Act 2008 (the Act) of the date on which the provisions of the Code of Professional Conduct for Authorised Financial Advisers (which is set out in the Schedule of this notice) comes into force.

All the provisions of the Code come into force on the same date, 1 December 2010.
The draft code was prepared by the code committee (as required by section 87 of the Act) and approved 31 Explanatory note Financial Advisers (Code of Professional Conduct for Authorised Financial Advisers) Notice 2010 2010/384 by the Commissioner (under section 88 of the Act) and by the Min- ister of Commerce (under section 92 of the Act).

Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 28 October 2010.


This notice is administered by the Securities Commission.

12 32 Wellington, New Zealand: Published under the authority of the New Zealand Government—2010