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:
- remove regulatory boundaries, such as the adviser classifications (AFA, RFA, and QFE), the distinction between ‘class advice’ and ‘personalised advice’ and category 1 and 2 products
- allow financial advice to be provided online as well as in person
- set industry-wide standards for conduct and competence
Legislation
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.
Licensing
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.
- You will need a licence if you want to be a financial advice provider (FAP) and provide advice on your own account to your own clients – for example, you run your own business.
- You won't need a licence if you want to be a financial adviser or nominated representative who provides advice on behalf of another financial advice provider.
Download the Introductory guide to licensing requirements PDF to understand the process and what's required
Registration
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.
Go to the Financial Service Providers Register (FSPR) website
Standard conditions
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.
View the standard conditions for FAP licences PDF
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.
View the Code of Professional Conduct for financial advice services website
Disclosure requirements
You must disclose certain information to your clients to ensure they can make informed decisions.
View information about the disclosure requirements on MBIE’s website