Financial advice providers

Page last updated: 19 Jun 2019

What's happening now

Transitional licensing applications open on 25 November 2019. We recommend you apply early to ensure you have your licence in time for the start of the new financial advice regime on 29 June 2020.

Before applying for a transitional license, you will need to do the following:

We also recommend watching the video below which steps you through the online form process:

Background

In April 2019, the Government passed a new law changing the rules for how financial advice is provided to retail clients.
As part of the changes, the Government is removing three current adviser types – Registered Financial Advisers, Authorised Financial Advisers and QFE advisers.
From the start of the new regime, all advisers providing financial advice to retail clients will need to meet the same standards. You can only give advice to retail clients if you operate under a financial advice provider licence.
There will be two phases to financial advice provider licensing: transitional and full.
Financial advice providers will initially be able to apply to operate under a transitional licence and will have up to two years to obtain a full licence.

Who needs a financial provider licence?

You can hold your own licence, or you can work on behalf of someone else who holds a licence.

You will need a licence if you want to be a financial advice provider and continue providing advice on your own account to your own clients – for example, you run your own business now and want to continue doing this.
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 licensed financial advice provider – for example, you work for a financial advice firm or bank.

How to structure your business under the new regime?

The new financial advice regime has implications for the way you structure and operate your business.
If you choose to hold a licence, the new regime provides you with the flexibility to structure your business in a way that makes the most sense to you.
We have detailed 5 of the more straightforward ways you can choose to operate. They don’t cover all possible options. More complex business arrangements (including authorised bodies) or those mostly applying to larger organisations are not included.
There are other regulatory matters to consider in determining an appropriate business structure. MBIE’s website has some useful advice.
We recommend that you seek professional advice to help determine the outcome.

Your duties and obligations under the new regime

As a licence-holder, you will be regulated under the Financial Markets Conduct Act 2013 (FMC Act), as amended by the Financial Services Legislation Amendment Act 2019 (FSLAA)." You will need to meet certain duties and obligations.

New Code of Conduct

Anyone providing advice to retail clients is subject to a new Code of Professional Conduct for financial advice services as approved by the Minister of Commerce and Consumer affairs in May 2019. This outlines the standards of conduct, client care, competence, knowledge, and skill you need to meet when providing financial advice in New Zealand.

New Registration requirements

You will only be able to register as a financial service provider if you are providing services to New Zealand clients. This is a new requirement, which aims to improve client confidence and protect New Zealand’s good business reputation both at home and abroad.

The Companies Office is making changes to the Financial Service Providers Register (FSPR) to implement the changes to the registration requirements in the new regime.

Standard Conditions for transitional financial advice provider licences

Transitional Financial Advice Provider Licences are subject to conditions. From 29 June 2020, all Transitional Financial Advice Provider licence-holders will need to comply with these conditions. They include conditions imposed by FMC Act, the regulations, and any conditions imposed by FMA.