Customers are at the centre of a new code of conduct the Financial Services Council has launched to improve the sector's tarnished reputation, it says.
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The code covers major companies selling life insurance, managing investment or KiwiSaver funds, and requires them to act with integrity and ensure customers are treated properly.
Financial Services Council (FSC) chief executive Richard Klipin said the code would increase consumer trust in the industry.
"The sector needs, in a sense, to lift its game, to continue to improve, to better serve New Zealand consumers."
Breaches of the code may be punished with a range of sanctions ranging from a reprimand to fines of up to $100,000.
Mr Klipin said the penalties give the code "teeth," which is necessary for it to be taken seriously. However, it did not overrule regulation and law.
The code has taken two years to develop and will come into effect at the start of next year.
The savings and investment industry has been under scrutiny in the past couple of years over its selling practices, disclosure of information to consumers, conflicts of interest and big commissions.
The Financial Markets Authority (FMA) and the Reserve Bank of New Zealand are investigating the behaviour of major banks here to see if there have been any instances of the unethical and illegal behaviour revealed by an Australian inquiry into the sector.
FMA chief executive Rob Everett said it was "great" to have a code, but it would now be about how it was put into action.
"The FSC and its code give the sector the opportunity to see where change is needed and to adapt early. As you are beginning to see, slow adaptation diminishes consumer trust and in some jurisdictions has led to politicians forcing the change through rushed legislation or rule-making. That rarely goes well for anyone."