Article by Prescilla Dickinson, NewsHub, 15 March 2021. 

A new adviser regime is raising the bar on financial advice in New Zealand, setting out to improve its quality and availability.

From Monday, a new financial advice regime under the Financial Services Legislation Amendment Act 2019 comes into force. New rules require financial advisers to meet certain competency standards and abide by a new code of professional conduct, over a two-year transition period.

Under the code's requirements, people seeking financial advice can expect advisers to treat them fairly, to act with integrity and to give advice that's suitable and understood.

In an online statement on Monday, Commerce and Consumer Affairs Minister David Clark said as COVID-19 has affected numerous Kiwis financially, it's more important than ever that advisers act in their clients' best interests.

"Financial advice plays an important role in helping New Zealanders achieve significant milestones in their life, such as saving for a first home or planning for retirement," Clark said.

"The new regime will give consumers greater confidence to seek advice that will help with their financial goals, providing them with greater trust in the quality of that advice."

Executive director of Strategi Group David Greenslade told Newshub the reason for developing the regime was to improve advice quality and availability. Overall advice standards will be lifted and people should find getting access to advice easier.

"It now creates more of a level playing field so that at the end of the two-year transition period, the New Zealand public can trust that someone engaged to provide regulated financial advice has the competence, knowledge and skill to do so," Greenslade said.

From Monday March 15, all advisers must have a transitional license as a financial advice provider (as an individual or linked to business).  The transitional license lasts two years, during which time they're required to meet licensing standards and apply for a license, whilst continuing to provide financial advice. They're also required to demonstrate the same outcomes as the Level 5 New Zealand Certificate in Financial Services v2 (or a recognised equivalent).

"The public should be asking an adviser they are intending to use, if he/she has that qualification or one of the formal equivalent approved qualifications," Greenslade added.

To read more of this article visit Newshub here.