The Financial Advisers Act applies to all financial advice received by clients in New Zealand, including advice provided by advisers based overseas. Certain sections of the Act also apply to New Zealand-based advisers giving advice to overseas clients. These include the obligation to act with care, diligence and skill and not to act in a misleading or deceptive manner.
Overseas advisers who provide advice only to wholesale clients in New Zealand may not be required to be registered or authorised if they are "overseas financial advisers" (a type of exempt provider). See sections 5 and 20 of the Act.
Australian Advisers
Australian advisers who provide financial adviser services to clients in New Zealand will be subject to the New Zealand financial adviser regime. This includes the requirement that only individuals that are permitted under the Financial Advisers Act may provide certain services (see our Flowchart to determine if you need to be authorised or registered).
There are 2 exemptions which have been granted by the FMA that Australian advisers may be able to utilise:
1. Financial adviser firms licensed and operating from Australia:
- Under the Australian Licensees Exemption Notice 2011 an Australian licensed financial adviser firm which meets certain conditions will be able to provide certain financial adviser services to New Zealand retail clients without its specified representatives being registered or authorised.
- Advisers who have certain Australian qualifications and who are applying to be Authorised Financial Advisers (AFA) are exempted from the Code's educational qualification requirements.
- The applicants will remain subject to all other authorisation eligibility requirements and as AFAs will be subject to all applicable laws, including other provisions of the Code, the Financial Advisers Act, dispute resolution scheme requirements, terms and conditions of authorisation and monitoring by the FMA.
Trans-Tasman Mutual Recognition Act
There is a further avenue for Australian qualifications recognition under the Trans-Tasman Mutual Recognition Act. This is very limited in its application for financial advisers as it applies only to individuals (ie not firms) who are Australian licence holders when they apply to be authorised/registered under the New Zealand financial adviser regime.
