Page last updated: 24 June 2021

New Financial Advice Regime frequently asked questions

Here we provide answers to some of the common questions about the financial advice changes. We cover legislation, licensing and how to request information. If you can’t find the answer you need, please email [email protected].

About Licensing

A: We will continue to accept applications for full licences at any time. However, if you’re a transitional licence holder we encourage you to apply for a FAP full licence as soon as possible to ensure it is processed by the time your transitional licence expires at the close of 16 March 2023.

A: Download our 8 steps to applying for a FAP full licence action plan for an overview of the steps required.

Our licensing team is also available to help. Please contact us.

A: From 17 March 2023, anyone who provides financial advice to retail clients must either hold, or operate under, a Financial Advice Provider full licence. If your FAP full licence is not processed in time, you will need to temporarily stop providing advice. We recommend you have a contingency plan in place. This may include having another licensed financial advice provider provide support to your clients.

A: We currently aim to respond to applications within 60 days. However, this timeframe can change at any time depending on the volume and complexity of applications being submitted. 

By submitting their application well before 16 March 2023 applicants give themselves the best chance of ensuring their full licence is processed before their transitional licence expires.

A: A Class 1 licence is intended for sole adviser practices. You’ll need to apply for (and hold) a Class 2 licence before you bring other advisers under your licence. For more information, see How the FAP licence classes compare pdf. 

Or explore your options to see which licence class is right for you.

A: Financial advice providers giving advice to retail customers need to either hold a licence or be an authorised body under a licence.

alt

If you provide advice to wholesale clients only, you do not need a licence but certain duties still apply – such as the duty to give priority to your client’s interest when there is a conflict, and to exercise care, diligence and skill when giving advice. For more information, see Who needs a licence.

A: As part of helping the sector transition to the new financial advice regime, all financial advice providers (FAPs) were initially able to operate under transitional licences. These expire at the close of 16 March 2023. From 17 March 2023, anyone who provides financial advice to retail clients must either hold, or operate under, a Financial Advice Provider full licence.

A: A full licence is a licence you must have before your transitional licence expires if you wish to continue providing regulated financial advice to retail clients.

If you are not applying for your own full licence, you must operate under another financial advice provider’s licence.

There are three classes of FAP full licence.

Once granted, full licences are subject to seven standard conditions, as well as any specific conditions added to a licence, and any conditions under the FMC Act and FMC Regulations.

For more information, see How to apply for a full licence or download the FAP full licence application kit.

A: Applications are made online.

Before you begin, watch the video tutorial or read our FAP full licence application kit to see what questions we’ll ask.

You’ll need to know which licence class you’re applying for and have an updated FSPR registration.

Once you’re ready, and have a Real Me Login, you can proceed directly to the FMA portal and apply for your full licence.

You don’t have to complete your licence application in one sitting. Complete what you can, then save a draft, and return to it when you’re ready.

See How to apply for a full licence for more information.

A: Unlike a transitional licence, a full licence has no expiry date unless the FMA specifies one, you give notice to cancel your licence, or the FMA withdraws it. 

A. If any of your information changes after you have submitted your application email us the details, including an explanation of the change(s) and we will advise if we require any further information or if an additional fee applies. Email us about changing submitted information at [email protected].

A: No – Financial Advice Provider licences cannot be transferred.

 

Understanding the legislation

A: The new regime started on Monday 15 March 2021. See the Ministry of Business, Innovation and Employment’s timeline for more information.

A: The legislation requires financial advisers to register on the Financial Service Providers Register, whereas a nominated representative does not need to.

Nominated representatives have less discretion than financial advisers and can only provide advice if the provider has sufficient processes and controls in place. These processes and controls must:

  • limit the nature and scope of the advice given
  • allow the financial advice provider to regulate the type of advice given and when
  • ensure nominated representatives have the correct competence, knowledge and skill needed for the advice being provided.

About the competency requirements

A: The standards of competence, knowledge and skill you must meet are set out in the new Code of Professional Conduct for financial advice services.

 

A: Under the transitional arrangements in the Financial Services Legislation Amendment Act 2019, there is a “Competency safe harbour” built in to the transitional period at the start of the new regime. This generally means that, if you were registered or authorised to provide advice under the Financial Advisers Act 2008 regime, at the time the new regime began on 15 March 2021, you have up to two years to meet any new competency requirements. In the meantime, during the transitional period, you can continue to provide the advice you were legally permitted to under the Financial Advisers Act 2008. Note that this competency safe harbour expires at the end of the transitional period on 16 March 2023.

A: There are a number of Tertiary Education Organisations (TEOs) that offer this certificate. For more information about what the certificate covers, and for a list of NZQA-approved providers, see the Skills NZ website

Help and information

A: You can email [email protected] or call us.