The Financial Advice Code Committee (Committee) released an update that the Minister of Commerce and Consumer Affairs has approved a new version of the Financial Advice Code (Code), which will take effect on 1 November 2025.
The update is available here and the current Code with the approved marked up incoming changes is available here.
Who needs to read it? Why?
The Code applies to those who provide regulated financial advice to retail clients, namely financial advice providers (FAPs). FAPs must be aware of the updates to the Code, to ensure they provide advice that meets the required standard, only advise on matters in which they are sufficiently competent, and to avoid any exposure to liability for breach of the Code.
What does it cover?
The Committee announced last June that they were accepting submissions as part of their consultation process on updating the competence, knowledge, and skill requirements in the Code. Submissions were collected until August last year, and a summary of submissions was released this May. The Committee received 21 submissions, including feedback from a dispute resolution scheme, an educator, financial advice providers, individual advisers, industry associations (one with survey results from 387 advisers), and a law firm.
There were three proposals which were all accepted and will be implemented, each discussed below.
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The first proposal was to amend the Code to formally recognise version 3 of the New Zealand Certificate in Financial Services (Level 5). This change was prompted by the release of version 3 of the qualification, which is considered materially equivalent to version 2. The purpose of this proposal was to remove any ambiguity and ensure that FAPs who hold either version 2 or 3 are clearly recognised as meeting the competence requirements under the Code. Submitters overwhelmingly supported this proposal, and the Committee proceeded to amend the Code to explicitly recognise version 3 alongside version 2.
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The second proposal was to retain the Level 5 Certificate qualification outcomes as the minimum standard of competence, knowledge, and skill required for designing an investment plan. The purpose of this proposal was to confirm that the current qualification level remains appropriate and to clarify that, in some advice situations, additional competence may be required beyond the minimum standards specified in the Code. Most submitters supported retaining the Level 5 Certificate as the minimum standard for investment planning. However, a few submitters advocated for a higher qualification level, such as a Level 7 degree, citing potential benefits to professionalism and consumer confidence. The Committee reviewed these concerns but remained unconvinced that higher qualifications alone would lead to better advice outcomes. They emphasised the importance of balancing quality with availability of advice. As a result, the Committee accepted the proposal, removed the interim status of Standard 7, and amended the commentary to Standard 3 to reinforce that additional competence may be necessary in certain advice situations.
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The third proposal aimed to clarify the requirements for continuing professional development (CPD) under Code Standard 9. It involved adopting a more principles-based approach and expanding the commentary to include examples of CPD activities. The purpose of this proposal was to ensure that CPD supports ongoing development and reflects the dynamic nature of financial advice practice. There was broad support for the shift to a principles-based approach to CPD. Many submitters endorsed the inclusion of mentoring as a valuable CPD activity, especially for new advisers. Some expressed concerns about the ambiguity of the term “continually develop”. Others questioned the removal of explicit references to maintaining an up-to-date understanding of the regulatory framework. The Committee addressed these concerns by expanding the commentary to include examples of both structured and informal CPD activities, including regulatory updates. They retained the principles-based language and clarified that CPD should be tailored to the adviser’s practice, experience, and operating environment. The proposal was accepted, and Code Standard 9 was revised accordingly.
What next?
The changes to the Code will come into force on 1 November 2025. We welcome the clarity that the updates to the Code will provide.
If you have any questions in relation to how the updates to the Code will affect you or want guidance on how to ensure your compliance with the Code, please contact one of our experts.
This article was co-authored by Olivia Maher, a Solicitor from our Financial Services team.
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