The laws governing financial advice in New Zealand have changed.
As part of the changes, the three adviser types – Registered Financial Adviser (RFA), Authorised Financial Adviser (AFA) and QFE adviser have been removed – and all advisers need to meet the same standards and are subject to a Code of Professional Conduct for Financial Advice Services.
To give financial advice to retail clients in the new financial advice regime, individuals must either hold a Financial Advice Provider (FAP) licence, or be engaged to operate under a Financial Advice Provider’s licence as a Financial Adviser, or Nominated Representative.
Licensing is being introduced in two phases: transitional and full.
Transitional licences are valid for up to two years from 15 March 2021.
Transitional licence-holders will need to apply for and be granted a full licence by 16 March 2023 if they want to continue provide a financial advice service under their own licence.
From 16 March 2021, anyone applying for a Financial Advice Provider licence must apply for a full licence.
The way you operate in the new financial advice regime will depend on your plans for, and how you want to structure, your business. It’s important to seek professional advice before deciding whether to either apply for a Financial Advice Provider licence, or operate as an Authorised Body, or financial adviser under someone else’s licence.
You can apply for a licence in your individual name or in your company name.
If you apply for a licence in your individual name you must refer to yourself as a financial advice provider – not a financial adviser – and you will be personally responsible for any liabilities incurred as a financial advice provider (including liabilities for breach of legal duties).
If you apply for a licence in your company name, your company will then engage you, personally, as a financial adviser under its Financial Advice Provider licence.
How to apply for a Financial Advice Provider full licence
There are two steps to applying for a Financial Advice Provider full licence:
Login to the FSPR on the Companies Office website and register your intention to apply for a Financial Advice Provider full licence*. Make sure you register in the name of your company if it’s your company that will hold the licence. (* If you’re applying for a FAP full licence the relevant service on the register is “Financial advice provider – licensee – full licence”)