About the new financial advice regime

The Act introduces a package of changes to the regulation of financial advice. It sets out the duties that will apply to providers and individuals e.g. persons giving advice must prioritise clients’ interests.

The Act passed into law in April 2019. The new regime for financial advice will come into effect on Monday 15 March 2021.

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

You must disclose certain information to your clients to ensure they are making informed decisions.

Consultation on the draft disclosure regulations closed on 8 November 2019 – keep an eye on MBIE’s website for updates.

To address misuse of the Financial Service Providers Register (FSPR), 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 requirement in the new regime.

Financial advice provider licences are subject to conditions.  From the start of the new finanical regime (early 2021) all transitional licence-holders will need to comply with these conditions.  They include conditions imposed by the FMC Act, the regulations, and any conditions imposed by FMA.

• Provides information on regulatory requirements, like guidance about the licensing application process
• Assesses and issues licences for financial advice providers
• Collects data, and monitors compliance and outcomes through ongoing supervision
• Takes enforcement action when needed.

• Responsible for monitoring and evaluating the performance of the Financial Advisers Act and the Financial Service Providers Act
• Carried out the review of the above acts
• Recommended legislative changes to government
• Considers and recommends regulations containing technical details to support the legislation. This includes:
• the disclosure requirements for those providing ­financial advice, and
• setting fees and ongoing levies.

Registers relevant firms and individuals on the Financial Service Providers Register (FSPR.)

• An independent group appointed by the Minister of Commerce and Consumer Affairs to prepare the code of conduct. This sets out minimum standards of:
• competence, knowledge, and skills
• ethical behaviour and client care
• Once approved by the Minister, and when the new regime comes into effect, the new code will replace the existing code of conduct, made under the Financial Advisers Act.