There are obligations in the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 for individuals and companies providing broking services. These provisions apply to anyone providing broking services, whether or not they are financial advisers. Employees carrying out broking services on behalf of their employer can rely on their employer's registration as a broker.
The Financial Advisers Act defines a broking service as the
receipt, holding, payment, or transfer of client money/property by
someone acting as an intermediary for a client. A person acts as an
intermediary if they do not receive, hold, pay or transfer the
money/property on their own account. The simple transmission of a
non-transferable instrument payable to another person is not
considered to be a broking service (e.g. non-transferable cheques
and automatic payment forms).
Mortgage brokers or insurance brokers will not be ' brokers' under the legislation, if they do not provide 'broking services' as defined in the Act, but they will often be financial advisers.
The following are not considered to be providing broking services for the purposes of the Act:
- lawyers, incorporated law firms, conveyancing practitioners, chartered accountants, tax agents, real estate agents, registered legal executives providing a service in the ordinary course of their business
- employers providing a service to an employee in connection with a financial product made available through the person's workplace.
Note, this is not an exhaustive list of exemptions. For more information see sections 77B and 77C of the Act.