Some financial advisers fear a ban on commissions could deter people from getting much-needed financial advice, and instead line the pockets of investment funds.
Under a voluntary code, financial advisers will not be paid commission on investment products they sell. Instead, consumers will directly negotiate a fee with their financial adviser.
The code is expected to be finalised shortly, and to take effect in about 18 months.
The Investment Savings and Insurance Association (ISI) believes the code will ensure customers are fully aware of the cost of the advice, and how it's being paid.
An adviser with Financial Focus, Murray Weatherston, doubts the policy will be well received by the industry, and says some may see it as an attempt by fund managers to increase profitability.
The publisher of Good Returns, Philip Macalister, says consumers should be able to choose if they would like a fee-based or commission-based model.
The Securities Commission is already preparing a code of conduct for financial advisers. Its financial advisers commissioner, David Mayhew, says the code will require advisers to put the interests of clients first and be transparent about fees and payments.
A financial services partner with PricewaterhouseCoopers, Paul Mersi, says the code won't necessarily prevent regulation down the track.