New Zealand’s Financial Services Council (FSC) introduced a code of conduct for financial services in September after “recognising the need for the industry to take action to improve itself”.
The code will come into force from 1 January 2019 and supports exiting law and regulations.
It applies to all members of the FSC, which includes 95% of New Zealand’s life insurance market. Other members are disability and income insurance providers, fund managers, professional services and technology providers to the financial services sector.
The move does not appear to have been prompted by a specific event, but New Zealand has been witness to the ongoing Australian Royal Commission into banking, superannuation and financial services.
The fallout has seen financial firms in Australia raked over the coals for their treatment of customers.
What’s in the code?
The code of conduct introduces nine standards focused around three core objectives:
- Principal ethical standard, ensuring business is carried out professionally and with due care;
- Customer perspective standards, ensuring effective two-way customer communications; and,
- Delivering good customer outcomes, ensuring effective products and distribution, training, risk management, conflict management and fair treatment of customers.
Breaches of the code will be assessed be an independent disciplinary committee and potential sanctions range from a reprimand, to fines up to NZ$100,000 (£49,971, $64,888, €56,435), through to expulsion from the FSC.