Frequently asked questions

A: The Government has confirmed that the new financial advice regime, set out in the Financial Services Legislation Amendment Act 2019 (FSLAA), will commence on 15 March 2021. This follows the earlier announcement of its delay from 29 June 2020 to allow the sector to focus on helping clients through the impacts of COVID-19.

Transitional licensing will also now remain open until 15 March 2021, but we encourage you to apply early to ensure you have your licence in time for the start of the new regime.

In the meantime, the Financial Advisers Act 2008 continues to apply.

A: Yes, all transitional licences that have been approved remain valid and will now come into effect when the new financial advice regime starts on 15 March 2021. You will not need to reapply. 

A:

• If you haven’t yet made a decision about how to operate in the new regime you now have more time. The online application portal is open here for those who are ready to apply for a transitional licence.
• If you’ve already been granted a transitional Financial Advice Provider licence, this will come into effect from the start of the new regime on 15 March 2021. You don’t need to reapply.
• And if you’ve already applied for a transitional Financial Advice Provider licence that has yet to be granted, you can expect to hear from us once it’s assessed.

Transitional licensing remains open and our licensing team is continuing to process applications as resources are available and in time for the start date of the new regime on 15 March 2021.

If you have any questions about the transitional licence application process please email questions@fma.govt.nz or call us on 0800 434 566. 

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. 

A: Only certain financial advice providers can use nominated representatives under a transitional licence (for example banks that are QFEs). 

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

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.

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.

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.

A: You can only use nominated representatives under a transitional licence if before 9 April 2019, you were:

• a QFE, a member of a QFE group, or
• a firm registered on the Financial Service Providers Register that provides class advice through staff who are not individually registered on the FSPR. The transitional licence will be subject to a condition that, in this case, the nominated representatives must not provide a personalised service.

These are statutory licence conditions applicable to transitional licences.

Please take care completing this step in your transitional licence application. If you indicate that you intend to engage nominated representatives and you are not permitted to do so, your application for a transitional FAP licence may be declined.

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.

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 in the Who will need a licence to provide financial advice PDF.

A: A transitional licence is a licence you must have by the start of the new regime (15 March 2021) 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.

A: Transitional licensing applications opened on Monday 25 November 2019. The application window will be open until 15 March 2021, but we recommend you apply early to ensure you have your licence in time.

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.

A: Full licensing will be open from 15 March 2021, essentially forever. 

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.

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.

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.

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. 

A: We strongly recommend you submit your application as early as possible. The new financial advice regime comes into effect on 15 March 2021.

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

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.

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 at the start of the new regime (15 March 2021).

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.

A. If any of your information changes after you have submitted your application email us the details, including an explanation of the change(s) and we will advise if we require any further information or if an additional fee applies. Email us about changing submitted information at licensing@fma.govt.nz.

A. Contact the Licensing team at licensing@fma.govt.nz – we will forward you the FAP Transitional Appointment of New Director Senior Manager form for completion - return the signed form to licensing@fma.govt.nz

A. Contact the Licensing team at licensing@fma.govt.nz – we will forward you the FAP Transitional Change of New Director Senior Manager notification form for completion - return the signed form to licensing@fma.govt.nz

A.  If you need to add an authorised body to your application email us at licensing@fma.govt.nz.  We will send you an application form to complete, sign, scan and return.  We will require a form to be completed for each authorised body.  When we receive the completed form(s) the FMA will provide you with an invoice and payment instructions.

A: The new financial advice regime applies to anyone who provides financial advice to retail clients from 15 March 2021. If you are planning to provide financial advice to retail clients from that date you can either get your own transitional Financial Advice Provider’s licence or operate under someone else’s. For more information on your options in the new regime, see our Explore your options tool.

A: This is a decision you need to make before you update your FSPR registration on the FSPR and apply for your transitional Financial Advice Provider licence. Your licence can be in your business name (if you’re a company or a partnership) or your individual name. Please see our “Registering correctly on the FSPR” factsheet (Link) for further information on the differences between holding a Financial Advice Provider licence in your business name or individual name. If you are unsure how to operate in the new regime, we suggest seeking professional advice. Please contact licensing@fma.govt.nz if you have any questions about holding a Financial Advice Provider licence in your business name or individual name.

A: Please contact licensing@fma.govt.nz.

For example, if a financial advice business gets a transitional Financial Advice Provider licence then winds up that entity and starts a new entity, can the transitional licence be transferred to the new entity (limited liability company)?

A: No – transitional licences cannot be transferred. The new entity would need to either:

• apply for a full licence after the new financial advice regime starts 15 March 2021 OR
• apply for a transitional licence before the start of the new regime.

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 Financial Services Legislation Amendment Act 2019, if you are already providing advice there is a two-year timeframe built in to enable you to meet any new competency requirements.

You must continue to comply with requirements under the Financial Adviser Act 2008 until the start of the new regime on 15 March 2021.

A: Under the transitional arrangements in the Financial Services Legislation Amendment Act 2019, there is a “Competency safe harbour” built in to the transitional period at the start of the new regime. This generally means that, if you were registered or authorised to provide advice under the Financial Advisers Act 2008 regime, you have up to two years to meet any new competency requirements. In the meantime during the transitional period, you can continue to provide the advice you were legally permitted to under the Financial Advisers Act 2008. Note that this competency safe harbour expires at the end of the transitional period, two years after the new financial advice regime begins.

A: There are a number of Tertiary Education Organisations (TEOs) that offer this certificate. For more information about what the certificate covers, and for a list of NZQA-approved providers, see the Skills NZ website. 

A: You can email questions@fma.govt.nz or call us on 0800 434 566.

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. 

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, 15 March 2021. 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.