The laws governing financial advice in New Zealand have changed.
On 15 March 2021, the Financial Markets Conduct Act 2013 was amended by the Financial Services Legislation Amendment Act 2019, introducing a new framework for giving financial advice.
Known as the financial advice regime, the framework changed how we regulate financial advice in New Zealand. The changes are designed to:
The Financial Services Legislation Amendment Act introduces changes to ensure the conduct and client-care obligations of financial service providers and the regulation of financial markets remain fit for purpose. It also addresses misuse of the financial service providers register by offshore entities. The changes are designed to:
The Financial Services Legislation Act 2019 passed into law in April 2019, repealing the Financial Advisers Act 2008 on 15 March 2021. The Financial Markets Conduct Act 2013, (as amended by the Financial Services Legislation Amendment Act 2019), sets out the duties that now apply to providers and individuals.
To give financial advice to retail clients, individuals must now either hold a Financial Advice Provider (FAP) licence or be engaged to operate under a Financial Advice Provider’s licence as a Financial Adviser or Nominated Representative.
Ways to operate under the regime
We have provided information about 5 different ways you can operate under the new regime. These are the more straightforward ways you can operate going forward. They don’t cover all possible options – for example, more complex business arrangements (including authorised bodies) or those mostly applying to larger organisations are not included.
To address misuse of the Financial Service Providers Register (FSPR), you will only be able to register as a financial service provider if you are providing services to New Zealand clients. This requirement aims to improve client confidence and protect New Zealand’s good business reputation both at home and abroad.
Financial advice provider licences are subject to seven standard conditions, as well as conditions imposed by the FMC Act, the regulations, and any specific conditions imposed by the FMA.
Code of Conduct
Anyone providing advice to retail clients is subject to a new Code of Professional Conduct for financial advice services. This outlines the standards of conduct, client care, competence, knowledge, and skill you need to meet when providing financial advice in New Zealand.
You must disclose certain information to your clients to ensure they can make informed decisions.
A number of Government Agencies are involved in the implementation and oversight of the Financial Services Legislation Amendment Act 2019 (FSLAA):
Financial Markets Authority
Ministry of Business, Innovation and Employment
Considers and recommends regulations containing technical details to support the legislation. This includes:
New Zealand Companies Office
Registers relevant firms and individuals on the Financial Service Providers Register (FSPR).
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