Plain language law

New Zealand law explained for everyone

Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Additional regulation of financial advice and financial advice services - Duties on persons giving regulated financial advice

431K: Duty to give priority to client’s interests

You could also call this:

"Put your client's needs first when giving financial advice"

Illustration for Financial Markets Conduct Act 2013

When you give regulated financial advice to someone, you have a duty to put their interests first. If you know, or should know, that your own interests or someone else's interests might conflict with the person you are advising, you must take steps to make sure your advice is not influenced by those interests. You must prioritise the person's interests and make sure your advice is fair and unbiased.

If you are giving advice, you must not let your own interests or the interests of someone connected to you influence the advice you give. This means you must take all reasonable steps to ensure the advice is fair and in the best interests of the person you are advising.

When giving advice, people connected to you can include those you work with, your employer, or people who work with your employer. You can find more information about the law that covers this in the Financial Services Legislation Amendment Act 2019.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS465815.

Topics:
Money and consumer rights > Banking and loansMoney and consumer rights > Consumer protectionBusiness > Industry rulesBusiness > Fair trading
Previous

431J: Duty to ensure client understands nature and scope of advice, or

"Make sure your client understands the financial advice you give them"

Next

431L: Duty to exercise care, diligence, and skill, or

"Be careful and skilled when giving financial advice, like a prudent person would."

Part 6Licensing and other regulation of market services
Additional regulation of financial advice and financial advice services: Duties on persons giving regulated financial advice

431KDuty to give priority to client’s interests

  1. This section applies if—

  2. a person (A) gives regulated financial advice to a client (C); and
    1. A knows, or ought reasonably to know, that there is a conflict between—
      1. C’s interests; and
        1. A’s own interests or the interests of a person connected with the giving of the advice.

        2. In giving the advice, A must give priority to C’s interests by taking all reasonable steps to ensure that the advice is not materially influenced by any of the following:

        3. A’s own interests:
          1. the interests of a person connected with the giving of the advice.

            1. In this section, each of the following is a person connected with the giving of the advice:

            2. a person associated with A:
              1. if A gives the advice on behalf of a financial advice provider,—
                1. the financial advice provider:
                  1. a person associated with the financial advice provider:
                    1. if A is engaged by the provider through 1 or more interposed persons,—
                      1. an interposed person:
                        1. a person associated with an interposed person.

                      Notes
                      • Section 431K: inserted, on , by section 29 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).