New Zealand law requires financial advisers to communicate clearly

Moving on from our previous post about US financial advisers and plain English, New Zealand advisers are already required to make themselves clear.

Code Standard 6 came into force on 1 December 2010, and says: ‘An Authorised Financial Adviser must behave professionally in all dealings with a client, and communicate clearly, concisely, and effectively.’

Read the full Code at http://financialadvisercode.govt.nz/

Catriona Grover, a partner at Kensington Swan law firm, presented on the new Code at the 11th Annual Super Funds Summit in March 2010. She said that the Capital Market Development Taskforce ‘recommends simplifying and standardising disclosure documentation’. This will help investors know exactly what they are investing in. So, expect disclosure documents to, in Catriona’s words:

• ‘feature prescribed wording in concise plain English
• be comprised of two parts, a very short prescribed overview and a longer "further information" document’.