Chapman Tripp submits on draft Code of Professional Conduct for Financial Advice Services

Chapman Tripp has submitted on the Code of Professional Conduct for Financial Advice Services, indicating its support for the draft Code, but has suggested some important modifications to make the Code more workable in practice, including:

  • acknowledging in Code Standard 1 (Ethical behaviour, Conduct and Client Care) that advisers need not take steps that are unreasonable in the circumstances, to ensure there is a practical balance in expectations,
  • aligning Code Standard 3 (Manage conflicts of interest) with the Bill, which already contains suitable duties in respect of conflicts,
  • moderating Code Standard 5 (Give advice which is suitable for the client) so advice does not need to be personalised if the client does not require it to be, or when it is included in mass publications, like broker reports, for practical reasons,
  • allowing in Code standard 7 (Resolve complaints) for minor complaints to be resolved in the first instance by the individual involved, and
  • not imposing a duty on advisers when they are acting to actively promote confident and informed consumer participation in financial markets under Code Standard 8 (Not to bring the financial advice industry into disrepute). The current proposal imposes an active duty to promote participation, which goes beyond the proposed ‘avoid industry disrepute’ principle.

Our submission can be viewed here. ​

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Related topics: Financial services regulation; Code of Professional Conduct for Financial Advice Services

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