The Financial Markets Authority (FMA) just gave every NZ adviser a happier Christmas with an excellent piece of guidance to the entire financial services industry. Give them a bow, and throw a bouquet - they just got a big deal very right.
The industry has been seeking guidance on a number of issues since the advent of new regulations, which came into effect July 2011. The main piece of legislation governing advice is the Financial Advisers Act, supported by the Code of Professional Conduct ("The Code"). Both are largely "principles" based, as opposed to being overly prescriptive and full of "thou shalts" and "shalt nots". A laudable and eminently pragmatic approach to creating lasting legislation generally - though it tends to get a bit awkward to apply in its early stages. The key problem is the very people it applies to are initially left to try and interpret how a principle works and what the regulators or judiciary might think it means somewhere in the future.
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