QFEs & QFE advisers
QFE advisers do not have to be individually registered or be authorised if they only provide:
However QFE advisers need to be individually authorised if they:
QFE advisers who provide services to retail clients must belong to a dispute resolution scheme but can rely on the dispute resolution scheme membership of their employer or principal.
An adviser who provides personalised adviser services to retail clients on category 1 products not issued or promoted by the QFE or a member of the QFE group must be an Authorised financial adviser (AFA). They will be subject to the obligations that apply to AFAs.
QFE advisers are not subject to the Code of Professional Conduct for Authorised Financial Advisers. However, their QFE must demonstrate that it maintains procedures to ensure that retail clients receive adequate protection. For services for category 1 products, FMA must consider whether the QFE's clients receive protection of a similar standard to that provided by advisers who are subject to the Code, taking into account their scope of products. See section 66 of the Act.
The standard of professionalism expected from QFE and non-QFE advisers doing similar work is the same.
QFE Advisers can give financial advice to wholesale clients and can give class advice to retail clients. They can also provide personalised advice and discretionary investment management services for category 1 and category 2 products without being individually registered (and authorised), as follows:
|QFE structure||QFE advisers||Category 2 products||Category 1 products|
|a single entity QFE||Employees and nominated representatives of the QFE||Yes||Yes where QFE is product provider or for securities, the promoter|
|a QFE composed of partner entities||Employees of any partner entity and nominated representatives||Yes||Yes where any partner entity is product provider or for securities, the promoter|
|a QFE which has associated entities||Employees of the QFE (or its partner entities) and those of the associated entities and any nominated representatives||Yes||Yes where, OFE, partner entities or any of associated entities is the product provider, or for securities, the promoter|
A QFE can extend the range of financial products or services that its advisers may provide by applying to the FMA to approve the addition of one or more entities as associated entities.
Employees of any entity in the QFE Group and the QFE's nominated representative can advise on category 1 products where any entity in the same QFE Group is the product provider or in the case of securities, the promoter, and any category 2 product, without being individually registered or authorised (see section 18 of the Act).
Advisers who work for QFEs still need to be individually registered and authorised if providing the following services to retail clients:
Note, promoter has the same meaning as section 2 (1) of the Securities Act 1978. A QFE is not the 'promoter' just because the product carries a brand of the QFE Group.
For class and wholesale services, individuals providing only wholesale or class services (or both) are not expected to register, provided that their employer is a registered financial service provider (not necessarily a QFE) and remains registered.
Individuals who have voluntarily opted to be authorised for wholesale and class services will still need to register as individuals.
A QFE can nominate any individual adviser as a nominated representative (see section 74 of the Act). It does not have to nominate all of the agents who sell its products. A QFE can nominate advisers either in writing or if agreed by FMA via another mechanism. This will be included in the terms and conditions of its QFE status.
A person may not be a nominated representative of more than one QFE, except when the two QFEs are related companies, as this would cause confusion about which entity was responsible for the representative's conduct.
A QFE must provide FMA with a list of its nominated representatives, when requested. In addition, the terms and conditions of QFE status will specify how often the list must be provided.
A QFE may apply to the FMA to approve one or more entities as associated entities of the QFE (see section 65 and 67 of the Act). The QFE's application must state how it is connected to the associated entity. The QFE and its associated entities form a QFE Group.
If approved, the QFE is responsible for the advisers of the associated entity. The advisers in the QFE group can advise on products provided or promoted by the QFE and any of its associated entities without being individually registered and authorised.
A QFE group is the term used for either:
A QFE must choose a name for its QFE Group and submit it to us for approval (see section 69 of the Act). Employees of any entity in the QFE Group and its nominated representatives can advise on category 1 products where any entity in the same QFE group is the product provider or in the case of securities, the promoter, and any category 2 product without being individually registered or authorised (see section 18 of the Act).
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