A scathing assessment of the financial advice industry has led to resignations on a Securities Commission code-setting committee.
The committee is working to set a code of professional conduct for financial advisers.
The two industry representatives who quit are attached to companies where the quality of financial advice has been strongly criticised.
An investigation by watchdog Consumer New Zealand assessed the competency of financial advisers and found only three good plans out of 17 looked at.
Moneymax and Westpac were among firms whose financial advice was ranked "rejected", the lowest rating in the Consumer investigation, made public last week.
The resignations of Liz Koh of Moneymax and Patrick Middleton, a former head of wealth management at Westpac Bank, come four months after they were appointed to the 10-person committee.
Financial Advisers Commissioner Annabel Cotton says she accepted the resignations to remove the potential for loss of public confidence in the Code Committee.
Ms Cotton says there needs to be confidence in the code that is being prepared.
Ms Koh believes Consumer New Zealand is out of its depth and intends to challenge the report, saying the findings were misconstrued and sensationalised.
She says her decision to leave is about maintaining the committee's reputation.