As a financial adviser it is your responsibility to ensure that the licensed financial advice provider or authorised body that has agreed to engage you, then records details of the engagement on the FSPR.
The FAP (or authorised body) must link to you on the FSPR within 90 days of your registration. If this does not happen, you may be de-registered if you offer no other services.
Watch the short video below to see how a FAP links to a financial adviser on the FSPR or visit the Companies Office website for more information.
From the start of the new regime on Monday 15 March 2021, financial advisers will be charged an FMA levy (payable to the Companies Office at FSPR annual confirmation). You will also be charged a fee of $86.25 (incl GST) at annual confirmation.
MBIE have announced an increase in FMA levies, which will be phased in over the next three years. As an indication, the FMA levy for financial advisers payable for annual confirmations that fall between 15 March 2021 – 30 June 2021 will be $345 (incl GST).
For full details, including the increased levy amounts (exclusive of GST) that will apply from 1 July 2021 and 1 July 2022, see theMBIE website.
Anyone giving advice to retail clients must comply with a new Code of Professional Conduct for financial advice services. This outlines the standards of ethical behaviour, conduct, client care, competence, knowledge, and skill you need to meet when giving regulated financial advice to retail clients in New Zealand. The Minister of Commerce and Consumer Affairs approved the Code of Professional Conduct in May 2019. It takes effect from the start of the new regime on Monday 15 March 2021.
A person who gives financial advice must:
Part 1: Ethical behaviour, conduct and client care
1. Treat clients fairly 2. Act with integrity 3. Give financial advice that is suitable 4. Ensure that the client understands the financial advice 5. Protect client information
Part 2: Competence, knowledge and skill
6. Have general competence, knowledge and skill 7. Have particular competence, knowledge, and skill for designing an investment plan 8. Have particular competence, knowledge and skill for product advice 9. Keep competence, knowledge, and skill up-to-date
If you give financial advice to retail clients, you must:
Take reasonable steps to ensure your clients understand the nature and scope of the advice being provided, including any limitations about that. For example, you must explain if you’re only able to give advice about certain products.
Where there’s a conflict of interest you must give priority to your client’s interests.
Only recommend financial products to clients that are offered in compliance with theFMC Act and its regulations.
Ensure you follow the new disclosure regulations and that any information you make available to clients is not false, misleading or incomplete.
Competency safe harbour
Under the transitional arrangements in the Act, there is a "Competency safe harbour" built in to the transitional period at the start of the new regime.
If you’re an RFA immediately before 15 March 2021, you have a transitional licence or you are engaged by a licensed financial advice provider to give advice on their behalf, and you don’t already meet the competence knowledge and skill requirements of the new Code, you can make use of the two-year “Competency safe harbour”, while you work towards meeting those standards. This competency safe harbour applies to you, personally: it allows you to continue, for the first two years of the regime, to give the financial advice that you were legally permitted to provide as an RFA for the first two years of the regime, even if you move to work for a different financial advice provider.
If you’re an AFA immediately before 15 March 2021, the new Code provides ways in which you may use your AFA authorisation to demonstrate your competence, knowledge, and skill (as set out in part 2 of the Code). We encourage you to check your authorisation against the new Code to make sure you meet the particular competency requirements for the advice you intend to give.
After two years, the competency safe harbour expires and you will need to meet the standards of competence, knowledge and skill outlined in Part 2 of the new Code.
You must disclose certain information to your financial advice provider’s clients to ensure they can make informed decisions.
You can view information about the disclosure regulations on MBIE’s website.
Using Australian qualifications or experience to give financial advice in New Zealand
This information is based on the law as at 15 March 2021. If the law in Australian or New Zealand changes then our approach to recognising Australian qualifications may be amended1. Terms and expressions in this section have the same meaning as they are given in the Corporations Act.
New Zealand competency standards
Under the FMC Act, all regulated financial advice must be given by or on behalf of a FAP. A person must not give regulated financial advice to retail clients unless they meet the standards of competence, knowledge and skill required bythe Code. FAPs must take all reasonable steps to ensure that anyone they engage to give regulated advice to a retail client on their behalf complies with this requirement.
Standards 6 to 8 of the Code require capabilities equivalent to qualification outcomes of the New Zealand Certificate in Financial Services (Level 5) version 2. The Code lists certain ways that a person who gives financial advice may demonstrate the required standard (e.g., hold version 1 or 2 of the New Zealand Certificate in Financial Services (Level 5) or be an Authorised Financial Adviser immediately before the commencement of the Code).
The Code provides a flexible framework for a person to demonstrate their competence, knowledge, and skill. A person may demonstrate competence, knowledge, and skill in a way that is different from those listed in the Code. If this is done by reference to an alternative qualification or experience then it should be done in an objective, measurable and independently verifiable manner.
Australian professional standards1
We recognise that the qualifications and training under the Australian education and training standards for relevant providers listed below2collectively meet the standards of competence, knowledge and skill required by standards 6 to 8 of the Code, provided additional training has been completed on the requirements for qualification outcome 4 of the New Zealand Certificate in Financial Services (Level 5) version 2.
Completion of a degree or other qualification listed in the Corporations (Relevant Providers Degrees, Qualifications and Courses Standard) Determination 2020 (Australia) or completion of one or more courses that have been determined by the Financial Adviser Standards and Ethics Authority Ltd, as the standards body, to give an existing provider equivalent qualifications;
Passing the exam approved in the Corporations (Relevant Providers Exams Standard) Determination 2019 (Australia); and
Completion of the work and training professional year set by the Corporations (Work and Training Professional Year Standard) Determination 2018 (Australia)3.
Other overseas qualifications or experience may provide pathway
As noted above, the Code does not limit how you may demonstrate that you meet the required standards of competence, knowledge, and skill. If you have Australian qualifications that meet the former training standards under theAustralian Securities & Investments Commission’s Regulatory Guide RG146 for financial advisers who provide personal financial product advice to retail clients on Tier 1 products or you have other relevant overseas qualifications or experience they may still provide an individual pathway for you towards meeting some or all of the competence, knowledge and skill standards in the Code. Your FAP can help you work out whether your overseas qualifications or experience mean you demonstrate some or all of the standards of competence, knowledge, and skill in the Code. There is also an alternative pathway to demonstrating competence, knowledge and skill available through The Skills Organisation. You can find all the information and apply for this through theSkills website.
Continuing professional development
Any person who gives financial advice (including those with overseas qualifications or experience) must also comply with the continuing professional development requirements in standard 9 of the Code. Individuals must, at least annually, plan for and progressively complete learning activities designed to ensure they maintain the competence, knowledge and skill for the financial advice they give as well as (to the extent relevant to that financial advice) an up-to-date understanding of the regulatory framework for financial advice in New Zealand.
Terms and expressions in this section have the same meaning as they are given in the Corporations Act 2001 (Australia) unless the context otherwise requires.
See s921B (2) to (4) and s1546B(1) of the Corporations Act 2001.
Completion of the professional year is not required for existing providers.
Liability and enforcement
The FMA is one of several organisations that has a role in enforcing the new financial advice regime.
For an overview of what this will mean, see the MBIE fact sheets:
Q: Can I provide advice on behalf of more than one financial advice provider?
A: The legislation does allow for a financial adviser to work for more than one financial advice provider. However, these types of arrangements can lead to confusion for clients and there may be process issues to consider, such as how to manage complaints, privacy and disclosure.