Media advisory
MR No. 2019 – 26
21 June 2019
The Financial Markets Authority’s annual snapshot of Authorised Financial Advisers shows 140 advisers became AFAs in the year to the end of June 2018. That’s the highest number of new AFAs in the three years the FMA has broken down advisers being authorised and those whose authorisation lapses.
90 AFAs allowed their authorisation to lapse, compared to 110 a year earlier. This means the net number of AFAs rose by 50, compared to the loss of 30 AFAs a year earlier. The FMA welcomes this development, which will assist people in New Zealand to have access to quality financial advice.
This is the last time this annual snapshot will be published. The Financial Services Legislation Amendment Act gives effect to a new regulatory regime for financial advice, repealing the Financial Advisers Act and amending part of other financial services legislation.
The new regime is expected to come into force in June 2020 and is intended to improve access to high-quality financial advice for New Zealanders. In part, this is achieved through the introduction of universal conduct and client care duties, and licensing requirements for anyone giving financial advice to retail clients.
The Amendment Act removes the current categories of financial advisers: authorised financial advisers (AFAs), registered financial advisers (RFAs) and qualifying financial entities (QFEs). In the new regime, ‘financial advice providers’ will be licensed by the FMA and will be able to give financial advice on their own account (e.g. through a digital-advice platform) or engage individual ‘financial advisers’ or ‘nominated representatives’ to give advice on their behalf.
We have received a number of queries from advisers asking what the cut-off date is for AFA applications. While advisers can apply to be an AFA anytime up to the start of the new regime, we suggest they apply as early as possible to allow us time to complete their application – particularly if their application is received during the period we are assessing transitional licences.
Related
Report: AFAs in NZ - Sector snapshot
