Frequently asked questions

Q: When will the new regime start?

A: The new regime will start from 29 June 2020. See the Ministry of Business, Innovation and Employment’s timeline for more information.

Q: What are the minimum standards of competence, knowledge and skills I will need?

A: The standards of competence, knowledge and skill you must meet are set out in the new Code of Professional Conduct for financial advice services.

Under the transitional arrangements in the Bill, if you are already providing advice there is time built in to enable you to meet any new competency requirements.

You must continue to follow the standards set in the Financial Adviser Act 2008 until the start of the new regime.

Q: I am currently an RFA and would like to provide an investment planning service during the two-year transition period. How do I do that?

A: You should either:

• Become an AFA before the start of the transition period, or
• Ensure you meet all new competency standards under the new regime before providing the investment planning service.

For details of the proposed standards, keep an eye on the Financial Advice Code Working Group website. 

Q: What is the difference between a financial adviser and a nominated representative?

A: The legislation requires financial advisers to register on the Financial Service Providers Register, whereas a nominated representative does not need to.

Financial advisers and nominated representatives can both provide advice on behalf of a financial advice provider. However, nominated representatives will have less discretion than financial advisers and can only provide advice if the provider has sufficient processes and controls in place. These processes and controls must:

• limit the nature and scope of the advice given
• allow the financial advice provider to regulate the type of advice given and when
• ensure nominated representatives have the correct competence, knowledge and skill needed for the advice being provided.

Q: Can I be a nominated representative and a financial adviser?

A: No, you can be either a nominated representative or a financial adviser. To learn more about this, see section 431S of the draft Bill.

Q: Can I provide advice on behalf of more than one financial advice provider?

A: The legislation does allow for a financial adviser to work for more than one financial advice provider. However, these types of arrangements can lead to confusion for clients and there may be process issues to consider, such as how to manage complaints, privacy and disclosure. 

Financial advice providers will be considering these issues as part of their business planning. If you have decided you would like to provide advice under someone else’s licence we recommend you get in touch with them early to understand how they would like you to work under their licence.

See the MBIE fact sheet Can financial advisers be engaged by multiple financial advice providers? for more information.

Q: If I hold a transitional licence, can I engage nominated representatives to provide advice on my behalf?

A: Yes, if before 9 April 2019, you were:

• a QFE, or
• a firm registered on the Financial Services Provider Register that provides class advice through unregistered staff

Q: If I want to engage someone to provide financial advice under my licence, do they need to be an employee?

A: No.

Being an employee is just one of many ways you can engage individuals to provide financial advice under your licence. How you choose to engage someone may vary based on your business structure and how you consider it most appropriate to oversee the financial advice provided on your behalf.

Q: Who needs a licence?

A: Financial advice providers giving advice to retail customers will need to have a licence.

If you are providing advice to wholesale clients only, you will not need a licence but certain duties will still apply – such as the duty to give priority to your client’s interest when there is a conflict, and to exercise care, diligence and skill when giving advice. Read more here.

Q: What is a transitional licence?

A: A transitional licence is a licence you must have by 29 June 2020 (the start of the new regime) if you are a financial advice provider giving advice to retail clients.  If you are not applying for your own transitional licence, you must operate under another financial advice provider’s licence.

Your transitional licence will be valid for up to two years. If you want to continue providing financial advice to retail customers after your transitional licence has expired, you must first have applied for and been granted a full licence.

If you do not get your transitional licence during the transitional licensing application period, you cannot provide advice to retail clients until you have a full licence – unless you provide advice under another financial advice provider’s licence.

The process for applying for a transitional licence is more straightforward than the full licence application process. Read the transitional licencing guide.

Q: When will transitional licensing open?

A: Transitional licensing applications opened on Monday 25 November 2019. The application window will be open until 29 June 2020, but we recommend you apply early to ensure you have your licence in time.

Q: What is a full licence?

A: A full licence is a licence you must have before your transitional licence expires if you wish to continue providing advice to retail clients.

If you are not applying for your own full licence, you must operate under another financial advice provider’s licence.

Full licence applications open at the start of the new regime. The application process will be more comprehensive than the transitional licence application process.

We will keep you informed of timings and details when known.

Q: When will full licensing open?

A: Full licensing will be open from 29 June 2020 essentially forever. 

Q: I am currently an Authorised Financial Adviser and plan to become a financial adviser under the new regime; will I need a licence?

A: If you plan to provide financial advice to retail customers on your own behalf, you will need a financial advice provider’s licence.  

If you plan to provide advice on behalf of another financial advice provider, you won’t need a licence.

Q: I am currently a Registered Financial Adviser and plan to become a financial adviser under the new regime; will I need a licence?

A: If you plan to provide financial advice to retail customers on your own behalf, you will need a financial advice provider’s licence. 

If you plan to provide advice on behalf of another financial advice provider, you won’t need a licence.

Q: I am currently a QFE adviser; will I need a licence?

A: As a current QFE adviser, you won’t need a licence if:

• your employer has a financial advice provider licence, and
• you plan to continue providing advice on behalf of your employer as a financial adviser or as a 'nominated representative' (if permitted under your employer's licence).

We encourage you to talk to your employer about how the new regime will apply to you.

Q: How do I apply for a licence?

A: Applications are made online. We recommend watching the video tutorial or reading our transitional licencing guide to see the type of information you’ll need to provide. You may also wish to read the Guide to Registering Correctly on the FSPR. This information will be used by the FMA to determine whether to grant your licence and forms part of the data that the FMA holds for its regulatory purposes.  If you provide incomplete or incorrect information we may not be able to process your licence application. 

Q: What is the cut-off date for AFA applications?

A: It is still possible to apply to become an AFA up until the new regime takes effect from 29 June 2020, however, we recommend you submit your application as soon as possible – and contact us to ensure we’re aware it’s pending.

While you can apply to be an AFA anytime up to the start of the new regime, we suggest you apply as early as possible to allow us time to complete your application – particularly if your application is received during the period we are assessing transitional licences.

If you have a question about the application process, please email questions@fma.govt.nz.

Q: I'm already registered on the FSPR, why do I have to do it again?

A: You will have to register for the new financial advice provider service, either as a licence holder if you will apply for a licence in your name/your company's name or as an authorised body in your company's name if you intend to operate under someone else's licence. Please make sure you do this at least 24 hours before you start your application.

Q: I am a sole adviser practice and currently have an exemption from FSPR registration for my company. Does this still apply under the new regime?

A: The sole adviser exemption is an FSPR exemption that currently means that a body corporate (such as a company) providing financial adviser services does not need to be registered where its sole individual financial adviser is registered on the FSPR. The individual adviser must be the only director (or one of only two directors) and the only senior manager of the company. There are other conditions.

This exemption will be repealed from 29 June 2020 at the start of the new regime.

Financial advisers operating under this exemption who choose to operate in a similar way under the new regime will need to establish a new registration on the FSPR. You can do this from 25 November 2019 to 28 September 2020.

The steps are:

• Register your business or company on the FSPR between 25 November 2019 and 28 September 2020.
• Check you (as an individual) are correctly registered as a financial adviser on the FSPR.
• Apply for a transitional licence in the name of the company you have registered on the FSPR.
• When your company receives a transitional licence, you can then link yourself as an individual to that licence holder on the FSPR.

Note that there is relief from the first year’s levy of $529.00 (incl GST) FMA levy payable on initial registration on the FSPR. This will only apply if you are currently relying on the sole adviser exemption and choose to adopt a similar model in the new regime. You must apply for the exemption by 28 September 2020 to be eligible. For more info, see here.

Q: How can I ask a question or give feedback?

A: You can email questions@fma.govt.nz or call us on 0800 434 567 (+64 3 962 2698).

Q: What can I be doing now to ensure I meet the new licensing requirements?

A: Once we have finalised our new licensing processes, we will share this information with you.

In the meantime, read:

• Who needs a licence, the first in a series of fact sheets to help you prepare for licensing.
• Our guide to the FMA’s view of conduct to find out why good conduct matters and what we expect from the providers we license or authorise.
• Our licensing overview report 2017 to find out what you need to know to meet your licence obligations and the steps you can take to ensure your application has a better chance of success. 

Q: I am currently an AFA/RFA. How do I link to another financial advice provider’s licence in the new regime? 

A: If you are currently registered as an AFA or RFA on the FSPR, your status will automatically update to “Financial Adviser” from the start of the new regime on 29 June 2020. You will then need to make sure you are linked to a licensed financial advice provider on the FSPR. More detail about how to do this will be released on the Companies Office website here when available.

What you can do now: make sure that your information on the FSPR, including contact details, is up to date, and start a conversation with a licensed financial advice provider – this may be your existing employer. For more information, read the fact sheet Registering correctly on the FSPR. Note that if you are not engaged by a financial advice provider within the first three months of the new regime, you will be de-registered.