Media Release
MR No. 2022 – 38
Eighty-six per cent of financial advice providers have now embarked on – or completed – the full licence application process, according to latest statistics from the Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko.
Data from 30 September 2022 show 66% of financial advice providers are now operating under, or have applied to the FMA for, a full licence. A further 20% of providers have taken the step to register on the Financial Service Providers Register (FSPR) for the “financial advice provider-licensee-full licence” service but have not yet formally applied to the FMA for a licence.
The FMA had set 30 September 2022 as the target date for all transitional financial advice providers to apply for their Class 1 or Class 2 full licences. This was to help ensure all applications could be processed well before transitional licences expire on 16 March 2023.
John Botica, FMA Director of Regulation and Operations, said the latest stats reflected the sector’s commitment to the new licensing regime, which came into effect in March 2021 and allowed providers to operate under a transitional licence for the first two years.
“We are pleased the majority of transitional licence holders are choosing to step up and do the mahi required to apply for a full licence. This is a credit to everyone in the sector and will ensure New Zealand consumers can benefit from access to quality financial advice,” he said.
“The full licensing process is significantly more rigorous than transitional licensing, and we have kept an open mind about what proportion of advice providers would go on to complete the full licensing journey.”
Mr Botica said it appears the advice sector is undergoing some change with some providers choosing to become authorised bodies under another provider and smaller firms joining together. “However, at this stage we are not seeing any significant restructuring of the advice market - the smaller adviser firms remain prevalent,” he said.
As at 30 September the total number of licensed financial advice providers (both transitional and full) stands at 1,750 - a small reduction from the 1,800 at the start of the new regime in March 2021.
“We know there will be some applications right up to the wire, which we have actively warned against. Advice providers yet to submit their applications are encouraged to do so as soon as possible to avoid the risk of not having a licence to operate by the March 2023 deadline,” Mr Botica said.
About the new financial advice regime
Anyone who gives regulated financial advice to retail clients is required to either hold, or operate under, a Financial Advice Provider licence. To help the sector transition to the new licensing system, providers were initially able to operate under a transitional licence. However, all transitional licences expire on 16 March 2023, and financial advice providers must either hold, or operate under, a full licence to provide advice from that date.
Likewise, advisers operating under the competency safe harbour exemption have until 16 March 2023 to meet the competence, knowledge and skill requirements of the code of professional conduct for financial advice services.
See How to apply for a full licence on the FMA website
ENDS
Media contacts:
Andrew Park
FMA Media Relations Manager
[email protected]
021 220 6770
Campbell Gibson
FMA Senior Adviser, Media Relations
[email protected]
021 945 323
