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?
There are two steps:
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.
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.
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.
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.