Who will need a licence to provide financial advice?

From the start of the new financial advice regimeon Monday 15 March 2021, you will need a licence if you want to be a financial advice provider and continue providing advice on your own account to your own clients – for example, you run your own business now and want to continue doing this. Read our transitional licensing application guide to find out more about how to complete your online application and what to ask for.

You won’t need your own licence if you want to be a financial adviser or nominated representative who provides advice on behalf of another licensed financial advice provider – for example, you work for a financial advice firm or bank.

Why get a transitional licence

To help you transition to the new regime, there will be two phases to the licensing process – transitional and full.

Transitional licensing is the first phase and comes into effect on Monday 15 March 2021.

A transitional financial advice provider licence is valid for up to two years and, along with the competency safe harbour, enables advisers to continue providing the advice they were legally able to provide before the new regime was introduced. This gives you time to meet any new competence, knowledge and skills standards needed.

If you do not get your transitional licence before the start of the new regime, you cannot provide advice  to retail clients until you have a full licence – unless you provide advice under another financial advice provider’s licence.

Already know how to operate under the new regime?

We have provided information about 5 different ways you can operate under the new regime. These are the more straightforward ways you can operate going forward. They don’t cover all possible options –  for example, more complex business arrangements (including authorised bodies) or those mostly applying to larger organisations are not included.

There will be two phases to the licensing process – transitional and full. You can apply for your transitional licence online from Monday 25 November 2019.

Providing advice on behalf of someone else

• If you would like to continue providing advice to retail clients, you must work on behalf of a licensed financial advice provider as either a financial adviser or a nominated representative – you cannot be both.
• You will NOT need a financial advice provider licence.

Single adviser business

• You WILL need a financial advice provider licence. 
• You will hold your own financial advice provider licence and will not have anyone else providing advice under your licence.
• The licence can be in your business name (if,for example, you run your business through a company and your company will hold the licence with you as the individual adviser) or your individual name (if you (personally) hold the licence in your own name).
• Holding a financial advice provider licence in your individual name means you cannot call yourself 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 (we will be providing more information about this).

Business or individual with financial advisers

• You WILL need a financial advice provider licence. 
• You will hold your own financial advice provider licence and will engage other financial advisers to work with you. 
• The licence can be in your business name or your individual name.  
• Holding a financial advice provider licence in your individual name means you cannot call yourself 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 (we will provide more information about this soon).
• Anyone you’re engaging to provide advice must be either a financial adviser or a nominated representative – they cannot be both.

Business with financial advisers and nominated representatives

• You WILL need a financial advice provider licence. 
• You will hold your own financial advice provider licence and engage financial advisers and nominated representatives to work with you.
• Anyone you’re engaging to provide advice must be either a financial adviser or a nominated representative – they cannot be both.
• You can only use nominated representatives under a transitional licence if before the 9 April 2019, you were a QFE, a member of a QFE group, or a firm registered on the Financial Service Providers Register that provides class advice through unregistered staff.

Business with nominated representatives

• You WILL need a financial advice provider licence.
• You will hold your own financial advice provider licence and engage nominated representatives to work with you.
• You can only use nominated representatives under a transitional licence if, before 9 April 2019 you were a QFE, a member of a QFE group, or a firm registered on the Financial Service Providers Register that provides class advice through unregistered staff.
• Anyone you’re engaging to provide advice must be either a financial adviser or a nominated representative – they cannot be both.

Unsure how to operate under the new regime? Explore some of the available options

The new regime provides you with the flexibility to structure your business in a way that makes the most sense to you.

We’ve created an easy-to-navigate tool to guide you through some of the options. It covers some of the more straightforward ways you can operate and includes factsheets and guides to help you prepare for the new financial advice regimeon Monday 15 March 2021.

‘Explore your options’ is a guide to get you started. It does not cover all possibilities – for example, the more complex business arrangements (including authorised bodies) or those that mostly apply to larger organisations are not included.

If you need advice about your particular situation, we recommend getting professional advice.