Page last updated: 24 June 2021

Who needs a licence

From the start of the new financial advice regime on Monday 15 March 2021, anyone who gives regulated financial advice to retail clients must either hold, or operate under, a Financial Advice Provider licence.

Licensing is being introduced in two phases: transitional and full.

Transitional licences are valid for up to two years from 15 March 2021.

Transitional licence-holders will need to apply for and be granted a full licence by 16 March 2023 if they want to continue providing advice under their own licence. From 16 March 2021, anyone applying for a Financial Advice Provider licence must apply for a full licence.

Who needs a licence to provide financial advice?

  • You will need a licence if you want to be a financial advice provider and provide advice on your own account to your own clients – for example, you run your own business. Read our Introductory guide to full licensing requirements to find out more about how to complete your online application and what we ask for.
  • You won’t need your own licence if you want to be a financial adviser or nominated representative who provides advice on behalf of another financial advice provider.

There are two steps:

  1. Login to the FSPR and register your intention to apply for a Financial Advice Provider full licence* at least 24 hours before you start your application with the FMA. (* If you’re applying for a FAP full licence the relevant service is “Financial advice provider – licensee – full licence)
  2. Then apply for your full licence with the FMA here.

You don’t need to apply for a Financial Advice Provider licence.

However, you must be registered on the FSPR and engaged by a licensed Financial Advice Provider (FAP) or authorised body.

As a financial adviser it is your responsibility to ensure that the licensed financial advice provider or authorised body that has agreed to engage you, records details of the engagement on the FSPR. 

They must do this within 3 months of your registration. If this does not happen, you may be de-registered if you offer no other services.

Watch the short video below to see how a FAP links to a financial adviser on the FSPR or visit the Companies Office website for more information.

 

Find out more about what it means to be a Financial Adviser in the new regime.

From the start of the new financial advice regime on 15 March 2021, a licensed financial advice provider (FAP) can have authorised bodies operating under its licence.

An authorised body is an entity (eg company or partnership) named on a FAP’s licence conditions that can provide the licensed service without needing its own licence. 

Note that individuals cannot be authorised bodies under a FAP licence and individual financial advice provider licence holders cannot have authorised bodies under their licences.

Find out more about the steps your business needs to take to be an Authorised Body under a FAP licence in the new regime.

If you intend to stop providing financial advice to clients, you have the option to deregister yourself from the FSPR here.

From the start of the new regime, financial advice providers will have three months to link to the financial advisers they engage, following the steps on the Companies Office website.

Financial advisers not shown on the register as being engaged by a financial advice provider after this time may face de-registration if they offer no other services.

To find out more about how to operate in the new financial advice regime, Explore your options or contact us.

What is a transitional licence?

A transitional Financial Advice Provider licence is valid for up to two years. Together with the competency safe harbour, it enables advisers to continue providing the advice they were legally able to provide before the new regime was introduced. This gives you time to meet any new competence, knowledge and skills standards needed.

If you did not get your transitional licence before the start of the new regime, you cannot provide advice to retail clients until you have a full licence – unless you provide advice under another financial advice provider’s licence.

Already know how to operate under the new 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.