31 March 2011

D-day for Financial Advisers

(Media releases from the Securities Commission)
31 March 2011

From 1 April, all financial advisers, or the companies they work for, have to be registered on the online Financial Service Providers Register, www.fspr.govt.nz. Advisers who should be on the register, but aren't risk hefty penalties.

Securities Commission Director of Financial Adviser Regulation, Mel Hewitson says that from tomorrow [1 April] investors should deal only with registered advisers.

"It's easy to check whether a financial adviser is registered at the online register. Investors can also use the register to see whether an adviser has taken the additional step of becoming licensed as an authorised financial adviser (AFA)."

AFAs can advise on more complex financial products and services and have to meet additional competence and conduct standards under the companion Financial Advisers Act which comes fully into force on 1 July.

Ms Hewitson says it's important people receive adequate protection whichever type of adviser they choose.

"Restoring investor confidence is at the heart of the financial adviser regulation."

At as 31 March there were 5,487 registered financial advisers throughout the country. So far, 1441 have applied to become AFAs, of which nearly 300 have been licensed.

Sixty-three financial entities have been granted a Qualifying Financial Entity (QFE) licence. QFEs will be responsible for some 20,000 advisers. Advisers in a QFE don't need to be individually registered but their QFE will be on the register.


Contact: Rebecca Barclay 04 471 7666

Note to Editors:

On Tuesday 29 March, Commerce Minister, Simon Power, announced a three month extension for Canterbury advisers affected by the 22 February earthquake. Affected advisers have until 1 July to ensure they are on the register of financial service providers, and until 1 October to finalise their authorisation and meet their other obligations under the Financial Advisers Act.

Background information

The Financial Service Providers Register was introduced under the Financial Service Providers Act.

Under the Act, financial advisers can register individually as an Authorised Financial Adviser (AFA) or Registered Financial Adviser (RFA). Entities can apply to become a Qualifying Financial Entity (QFE) and will take on responsibility for the advisers who work for them. AFAs and QFE advisers can advise on a wider range of financial products and services than an RFA can, but have to meet additional licensing requirements under the companion Financial Advisers Act which comes fully into force on 1 July.