Financial Advice Provider (FAP)

Go to the Financial Advice Provider licensing page

The following standard conditions apply to FAP licence holders:

Download the Standard Conditions for FAP licences PDF

Record keeping

Summary of what’s required

• You must create timely and adequate records in relation to your financial advice service.
• You must keep records for at least seven years.
• Your records must be available to be inspected and reviewed by the FMA.

Tools and help available

• Download the record keeping self-assessment tool PDF to help your FAP get ready to meet this full licence condition.
• To see what information you’ll need to provide when you apply for a FAP full licence, see the Record Keeping section in the FAP licence application kit.

Internal complaints process

Summary of what’s required

• You must have a process for resolving client complaints.
• Complaints must be dealt with in a fair, timely and transparent manner.
• You must keep records of all complaints, including the date the complaint was received and any action you took including if no action was taken then the reasons why.

Tools and help available

• To see what information you’ll need to provide when you apply for a FAP full licence, see the Complaints Handling section in the FAP licence application kit.

Regulatory returns

You must provide information to the FMA on a periodic or ongoing basis, or on request, in accordance with the requirements set out in a Regulatory Return Framework and Methodology. The requirements are presently not yet in place and the FMA will consult with the industry prior to publication of the requirements.

View more information on the FAP Regulatory Returns page

Outsourcing

Summary of what’s required

• You must ensure that the providers of any systems or processes you outsource to are capable of performing the service to a standard that meets your licence obligations. The condition only relates to those outsource arrangements where you rely on the outsource provider to meet your licensee obligations.

For more information, download the Standard Conditions for FAP licences PDF.

Tools and help available

• Download the key outsourcing arrangements self-assessment tool PDF to help your FAP get ready to meet this full licence condition.
• To see what information you’ll need to provide when you apply for a full licence, see the Outsourcing section of the FAP licence application kit.

Business continuity and technology systems

Summary of what’s required

• You must have and maintain an up-to-date business continuity plan that’s appropriate for the scale and scope of your financial advice service. 
• If you use any technology systems that are critical to the provision of your financial advice service you must ensure the information security of those systems is maintained.   
• Refer to the FMA information sheet Developing cyber resilience for financial advice providers for tips on building your cyber capability. 

Tools and help available

• Use FMA’s Online Services to send us an incident notification. Please review Guidance - Notification of incidents relating to the operational resilience of technology systems for more information. 
• Refer to the FMA information sheet Developing cyber resilience for financial advice providers for tips on building your cyber capability. 

Ongoing requirements

Summary of what’s required

• You must continue to satisfy the requirements for licensing at all times while you hold your full licence.  The requirements are specified in sections 396 and 400 of the FMC Act.  These requirements include (not an exhaustive list) your directors and senior managers remain fit and proper persons, you are capable of effectively performing its service, there is no reason to believe you are likely to contravene your obligations and you are registered on the FSPR.
• There are similar requirements for your authorised bodies, including that arrangements are or will be in place to ensure that you maintain appropriate control or supervision over the provision of the service by the authorised body.

Notification of material changes

Summary of what’s required

• You must notify the FMA if you implement any material change to the nature of or manner in which you provide your financial advice service.   The notification must be made, in writing, within 10 working days of implementing any such material change.  For example, if you change your compliance approach to relying on procedures, change your systems and expertise, commence to engage any financial advisers or nominated representatives where you were not previously permitted under your licence class, etc.
• This notification requirement is in addition to the statutory notification obligation which requires notification of certain matters such as resignation or removal of directors, senior managers and key personnel of your organisation or an authorised body etc.  Refer to Regulation 191 of FMC Regulation and section 412 of the FMC Act for the statutory notification obligations.

All financial advice providers are regulated under the Financial Markets Conduct Act 2013 (FMC Act), as amended by the Financial Services Legislation Amendment Act 2019 (FSLAA) and need to meet certain duties and obligations. Most of these duties apply to everyone giving advice, but there are a few additional duties for licensed financial advice providers, particularly providers who engage others to give advice on their behalf. Here’s a summary of the main duties that apply to everyone who gives regulated financial advice to a retail client:

Operational resilience reporting

All reports relating to operational resilience can now be reported online via our online portal. 

For more information on the notification process, please refer to Notification of incidents relating to the operational resilience of technology systems guide.

Notify the FMA via our online portal

Duties

If you give financial advice to retail clients, you must:

• Take reasonable steps to ensure your clients understand the nature and scope of the advice being provided, including any limitations about that. For example, you must explain if you’re only able to give advice about certain products.
• Where there’s a conflict of interest you must give priority to your client’s interests. Download the customer care – managing conflicts of interest self-assessment tool PDF to help your FAP get ready to meet this duty as part of preparing to apply for a full licence.
• At all times exercise care, diligence and skill.
• Comply with the new Code of Professional Conduct for financial advice services requirements for ethical behaviour, conduct and client care and meet the competence, knowledge and skill requirements.
• Only recommend financial products to clients that are offered in compliance with the FMC Act and its regulations.
• Ensure you follow the new disclosure regulations and that any information you make available to clients is not false, misleading or incomplete.

As a financial advice provider, you will have additional obligations, for example:

• Make sure anyone you engage to give advice under your licence complies with all the duties listed above.
• Have appropriate processes and controls in place when you engage nominated representatives. These should allow you to control the advice being given and the circumstances in which it is given.
• If you engage nominated representatives, ensure that you do not give, or offer to give, any inappropriate incentives.
• Tell the FMA if you materially contravene your obligations and must also let us know if you change the legal structure of your businesses or make certain other changes, such as changes in directors or senior people.
• Comply with any licence conditions we may include when granting your licence, including the standard conditions, and the licence conditions imposed by law.

General reporting

If any of the following occurs, the licensee or an authorised body must, as soon as practicable, send a report containing details of the matter to the FMA:

• The licensee or authorised body is, or it is likely that either will become, subject to an insolvency event, or a director or senior manager of the licensee or any key personnel of an authorised body is adjudicated, or is likely to be adjudicated bankrupt (whether in New Zealand or overseas).
• The licensee or an authorised body becomes aware that a relevant proceeding or action has been commenced or taken against the licensee, an authorised body, a director or senior manager of the licensee, or any of the key personnel of an authorised body.
• A director or senior manager of the licensee or any key personnel of an authorised body resigns, is removed or otherwise ceases to hold the office or position, or is appointed, employed or engaged.
• An auditor of the licensee or an authorised body resigns or otherwise ceases to hold office or is appointed (other than by way of reappointment).
• The licensee or an authorised body proposes to change its name or its legal structure.
• The licensee or an authorised body proposes to enter into a major transaction.
• The licensee or an authorised body becomes aware that a transaction or an arrangement has been entered into or is likely that a transaction or arrangement will be entered into that will result or has resulted in a person obtaining or losing control of the licensee or the authorised body.

Annual regulatory return 

All licensed FAPs are required to complete and submit an annual regulatory return. The regulatory return is a series of questions to obtain an up-to-date understanding of the nature, size and complexity of your financial advice provider service.  

Licensees will be required to complete an annual regulatory return for the 12-month period ending 30 June and submit it to the FMA by 30 September.   

We will notify all licensees when it is time to complete and submit the regulatory return. The first reporting period will be 1 July 2023 to 30 June 2024. Completed returns will be due by 30 September 2024. We will provide guidance and expectations to assist with completing the first regulatory returns.  

The information you provide us through the annual regulatory return helps us to: 

• better understand the profile and business of FAPs and the financial advice sector  
• will set the focus for FMA’s risk-based monitoring approach  

• ensure our resources are best directed to help promote the statutory objectives of the FMC Act, which include promoting the confident and informed participation of businesses, investors, and consumers in the financial markets, and the development of fair, efficient and transparent financial markets. 

If you would like to familiarise yourself with questions for the FAP regulatory returns you can find them here. The documents at this link are for information only; the actual regulatory returns data must be submitted through our online portal. 

Code of professional conduct

Anyone giving 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 giving regulated financial advice to retail clients in New Zealand. The Minister of Commerce and Consumer Affairs approved the Code of Conduct in May 2019. It takes effect from the start of the new regime on Monday 15 March 2021.

A person who gives financial advice must:

Part 1: Ethical behaviour, conduct and client care

1. Treat clients fairly
2. Act with integrity
3. Give financial advice that is suitable
4. Ensure the client understands the financial advice
5. Protect client information

Part 2: Competence, knowledge and skill

6. Have general competence, knowledge and skill
7. Have particular competence, knowledge, and skill for designing an investment plan
8. Have particular competence, knowledge and skill for product advice
9. Keep competence, knowledge, and skill up-to-date 

Visit the Code of Professional Conduct for financial advice services website.

Competence

As a financial advice provider, it’s your job to ensure your advisers and nominated representatives meet the competence, knowledge and skill standards set out in the Code of Professional Conduct.

Disclosure

There are disclosure obligations for those providing regulated financial advice to retail clients are detailed in the regulations 229A to 229J of the Financial Markets Conduct Regulations 2014.

Publicly available information

• If a Financial Advice Provider has an internet site, it must make certain information publicly available in order to help retail clients find a provider that meets their needs (see regulation 229C).

Disclosures relating to advice

Certain other information must be given to retail clients when:

• the nature and scope of the advice becomes apparent in order to enable clients to make an informed decision about whether to seek, obtain, or act on the advice (see regulation 229D); and
• the advice is given (if not before) in order to help clients make an informed decision about whether to act on the advice (see regulation 229E).

Complaints information

• If a complaint is made, the person making the complaint must be given information about the complaints and dispute resolution process (see regulation 229F)

More details about the information required to be disclosed can be found in Schedule 21A of the regulations here.

Requirements for form and manner of disclosure

The regulations include general requirements for the form and manner of disclosure (see regulation 229H).

All disclosures must be

• presented in a clear, concise, and effective manner;
• given prominence if presented with other information;
• in a format, font, and type size that are easily readable if given in writing; and
• free of charge.

You can also make information available or give information in the form and manner you reasonably consider appropriate, having regard to any stated purpose of the relevant regulation (see regulation 229H(3)).

For example, provided all other requirements are met, including a way to allow a recipient to readily store disclosure information in a permanent and legible form, disclosure of information through an email with a prominent hyperlink may be appropriate.

In this context, prominence may require a suitable warning as to the nature and importance of the information.

AML/CFT

Financial Service Providers registering or filing their annual confirmation on the Financial Service Providers Register are required to declare if they are captured under the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act 2009 as a Reporting Entity and who they are supervised by.

Find out more about your AML/CFT obligations, including whether you are Reporting Entity under the AML/CFT Act, on the AML FAQ web page.

All licensed Financial Advice Providers are required to complete and submit an annual regulatory return. 

Visit the Financial Advice Providers Regulatory Returns page for more information

Financial advice providers must pay fees to the Companies Office (including FMA levies) when they register on the FSPR and when they complete their annual confirmation. These fees also apply to any authorised bodies or financial advisers you engage.

Levies

The Financial Markets Authority (Levies) Regulations 2012 (the Regulations), as amended in 2020 and 2022, set out the levies payable by industry. The levies are set by the Ministry of Business, Innovation, and Employment (MBIE).

The FMA receives funding from the Crown and a proportion of our costs is recouped from industry through levies.

Levy Classes

A financial markets participant falls within one or more levy ’class’, depending on what financial services they provide.

• A levy must be paid for every levy class the financial markets participant falls within. Levies are payable on the relevant leviable event as described in column 3 of Schedule 2 in the Regulations.
• Some levy classes have been split in order to recognise the variations in size and nature of different financial market participants.
• Most levies are paid when making an annual confirmation to the Registrar of Financial Service Providers (the Registrar).
• Most levies are payable to the Registrar, via the (FSPR). However, some levies are payable directly to the FMA. This is set out in column 4 of Schedule 2 in the Regulations.
• The following levy classes are invoiced directly by the FMA:
• Levy Class 8, Levy Class 8A, Levy Class 10, Levy Class 10A, Levy Class 13 and Levy Class 16.

Levy Class description

The table below provides a high-level description of each levy class. For the full description of levy classes, see Schedule 2 in the Regulations. 

Offences

It is the responsibility of each financial service provider to ensure they are registered for the service(s) they provide and have paid the appropriate levies. As part of their online annual confirmation to the Registrar, they must select all of the applicable classes to determine the levies payable and confirm the information they have provided is true, correct and complete.

Under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the FSP Act) it is an offence to:

• provide services you are not registered for or state you are registered for a particular financial service when you are not
• make a representation relating to any document or information required by the FSP Act or its regulations knowing that it is false or misleading, or omit any matter knowing such omission is false or misleading.

These offences could result in a fine of up to $100,000 and/or imprisonment for individuals, and a fine of up to $300,000 for businesses.

It is also an offence under the FSP Act to fail to notify the Registrar if any of the details contained on the FSPR are no longer correct. Failure to notify could result in a fine of up to $10,000.

Levy waivers

We have discretionary power to waive a levy (in whole or part).

We will only do so if we are satisfied that the circumstances or characteristics of the financial markets participant are exceptional when compared with the circumstances or characteristics of others in the same class, so that it would make it inequitable for the person to pay the levy. The threshold is deliberately high.

The waiver power is not intended to be used to revisit settled policy positions.

Once we receive a waiver application and the fee, we will assess it.  If we decide to grant the waiver, we must notify our decision in the Gazette, and publish the decision and reasons for it on our website.

How to apply for a levy to be waived

You will need to email the following information to [email protected] with the subject line ‘Levy waiver application’.

• Name of person or entity applying for the waiver.
• Contact person for correspondence concerning the application including address, phone number and email.
• Indicate the persons/entity who will receive the benefit of any waiver granted.
• Specify which class(es) you seek a waiver from and whether a waiver is sought from the full levy or part and the amount thereof.
• Let us know your preferred date for any waiver to take effect.
• Explain why the waiver should be granted and why your circumstances are exceptional when compared with others in the same class.
• Provide all relevant facts in support of your application.
• Explain any regulatory benefit of FMA granting the waiver.
• Give details of any previous contact with officials (including their names) at FMA or MBIE (including the Companies Office) on the matter.

How to pay your waiver application fee

You can pay by electronic deposit or internet banking. Payment can be made by applicants or law firms making applications on behalf of their clients.

The person paying the application fee must be the person who pays the subsequent fees and costs. For example, if a law firm pays the application fee, that law firm must also pay any additional fees and costs.

We recommend if law firms apply for waivers on behalf of their clients, the parties discuss and agree who will be responsible for paying the FMA’s fees before submitting a waiver application.

* This is the name of the person paying the application fee. This person will be invoiced for any subsequent fees and costs. Payment by credit card is not available for this application process.

What are the fees

• A payment of $1,265 should accompany each application.
• This covers the application fee of $115 set out in the Financial Markets Authority (Fees) Regulations 2011 and an advance of $1,150 (including GST) for fees and costs to be incurred.
• These regulations set out charging rates of $230 (including GST) per hour for time spent by FMA Board members and $178.25 (including GST) per hour for time spent by FMA staff.
• These regulations are set by MBIE.

How long does it take

• Once we have been provided with all relevant information, it generally takes around six weeks to process an application.
• This may be longer if any policy questions arise.
• If your application is urgent, please provide the date you need the decision by.
• You must also provide reasons for requesting urgent consideration.

The FMA is one of several organisations that has a role in enforcing the Financial Markets Conduct Act 2013 (FMC Act), as amended by the Financial Services Legislation Amendment Act 2019 (FSLAA). For an overview of what this means, see the MBIE fact sheets:

Liability in the financial advice regime PDF

Enforcement in the financial advice regime PDF

Monitoring of licensed Financial Advice Providers (FAPs) PDF