Advisers' body reviewing ethics

The professional body for authorised financial advisers is reviewing its training courses and intends to place greater emphasis on ethics following the collapse of Dunedin adviser Barry Kloogh's companies.

At least 170 clients are owed between $12million and $14million after the liquidation of Financial Planning Ltd and Impact Enterprises Ltd, two firms of which Mr Kloogh was sole director.

Financial Advice New Zealand (Fanz) chief executive Katrina Shanks said situations like that faced by Mr Kloogh's clients reflected on all the organisation's members, even though 99.9% of them gave quality professional advice.

"It brings more awareness of the sector when you have an incident of poor behaviour or unethical behaviour and it is something we all have to be continually conscious of," she said.

"It raises the awareness of the public as well, and it is important that we respond to that in a professional manner."

The Serious Fraud Office is investigating Mr Kloogh.

No charges have been laid.

Fanz members worked with integrity and aimed to achieve the best possible outcome for their clients, Ms Shanks said.

"We have a regulator, legislation and regulations and a code of conduct there to try and ensure this never happens, but unfortunately there are instances where poor behaviour does happen, in every sector, and ours is no different.

"It is about trying to identify it and take action about it as soon as you possibly can."

Pending law changes had further "tools in the tool box" to allow regulators to identify and take action against fraudulent or poor behaviour by financial advisers, Ms Shanks said.

"There is also new legislation for financial institutions, which is being developed currently and which is going to the House in December, which will give the FMA the toolbox to do things around institutions regarding culture and conduct, which has previously been missing."

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