New Financial Advice Regime

About the new financial advice regime

• From Monday 15 March, the laws governing financial advice in New Zealand are changing.
• As part of the changes, the three current adviser types – Registered Financial Adviser (RFA), Authorised Financial Adviser (AFA) and QFE adviser are being removed – and all advisers will need to meet the same standards.
• To give financial advice to retail clients in the new financial advice regime, advisers must 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 (if they’re an employee of a bank, for example).
• To help the advice industry transition to the new financial advice regime, there will be two phases to licensing: transitional and full.
• Transitional licensing is open now.

When the changes come into effect

The Government has confirmed the financial advice regime will start on  Monday 15 March 2021.  In the meantime, the current Financial Advisers Act 2008 continues to apply. 

How to prepare for the new financial advice regime

The way you prepare for the financial advice regime will depend on your plans for your business. It’s important to seek professional advice before deciding whether to apply for a Financial Advice Provider licence.

You can apply for a licence in your individual name or in your company name.

If you apply for a licence in your individual name you must refer to yourself as a financial advice provider – not a financial adviser – and you will be personally responsible for any liabilities incurred as a financial advice provider (including liabilities for breach of legal duties).

If you apply for a licence in your company name, your company will then engage you, personally, as a financial adviser under its Financial Advice Provider licence.

How to apply for a transitional licence

There are two steps to applying for a transitional licence:

1. Login to the FSPR on the Companies Office website and register your intention to apply for a transitional Financial Advice Provider licence. Make sure you register in the name of your company if it’s your company that will hold the licence.  Read How to register correctly on the FSPR for instructions on how to do this.
2. Once your registration on the FSPR has updated, apply for your transitional licence with the FMA.

Useful links and resources

• We’ve compiled a list of frequently asked questions about the new financial advice regime. Read frequently asked questions here.
• The Financial Services Legislation Amendment Act has introduced some technical terms to describe the changes to how we regulate financial advice in New Zealand. Read through the list of most common terms and their explanation.
• Unsure how you wish to operate under the new financial advice regime? We’ve created an easy-to-navigate tool to guide you through some of the options. It covers some of the more straightforward ways you can operate and includes factsheets and guides to help you prepare for the start of the new regime on Monday 15 March 2021.
• Read more about how to register correctly on the FSPR.
• Prepare for your transitional licence application by reading the FMA transitional licensing guide.
• Find out what your obligations are as a Financial Advice Provider under the new regime.
• Find out what your obligations are as a Financial Adviser under the new financial advice regime.