FINANCIAL ADVICE PROVIDER (FAP) FULL LICENSING
All transitional licences expire on 16 March 2023. From 17 March 2023, anyone who provides financial advice to retail clients must either hold, or operate under, a Financial Advice Provider (FAP) full licence. You can apply here.
Financial Advice New Zealand supports its members through the full licensing process and provides advice, tools and workshops to ensure advisers understand their obligations in the new regime.
If you are a financial adviser but not a member of Financial Advice yet, please contact us about how you can join and gain access to all our great tools. Members can login here.
There are two steps to applying for a Financial Advice Provider full licence:
- Login to the FSPR on the Companies Office website and register for the Financial Advice Provider full licence service*. Make sure you register in the name of your company if it’s your company that will hold the licence. You’ll need to do this at least 24 hours before you start your draft application online. (* If you’re applying for a FAP full licence the relevant service on the register is “Financial advice provider – licensee – full licence”)
Click here for more information on how to manage your registration on the FSPR.
- Once your registration on the FSPR has updated apply on the FMA licensing portal. Apply now.
Key information and guides from the FMA
How to apply for a full FAP licence – everything you need to know when starting the FAP full licensing process. click here
Guide to Financial Advice Provider licence requirements and application kit
This guide is for businesses and individuals intending to apply for a Financial Advice Provider (FAP) Full Licence. It explains the FMA’s expectations as a regulator, the policies and processes you need to have in place to comply with the FMC Act and regulations, and the criteria you’ll need to meet to be eligible to apply for a full licence. Click here to view
Classes of financial advice service for full financial advice provider licence
Do you know which class of licence you are applying for? There are three classes of FAP licence: Class 1, Class 2, and Class 3. The licence classes relate to the manner in which regulated financial advice is provided under the licence, but do not limit the types of financial advice that may be provided. Licence classes are incremental from 1 to 3. Click here for an outline of the different licence classes
8 steps to apply for a FAP full licence
Use this checklist to track your progress now and identify the steps you still need to complete before you apply. Click here to view
Self-assessment tool – Record Keeping
Keeping accurate records of the financial advice you provide helps maintain a relationship of transparency and trust with your clients. It also ensures you can provide evidence of how you have complied with your licensee obligations as and when required. Use this self-assessment tool to see if you’re ready to complete the record keeping section of your Class 1 or Class 2 FAP full licence application. It should help you identify areas of strength or weakness in your full licence preparation so you can seek further help or advice and address any gaps before you apply. Click here to view
Self-assessment tool – Complaints handling
Use this self-assessment tool to see if you’re ready to complete the complaints handling section of your Class 1 or Class 2 FAP full licence application. It should help you identify areas of strength or weakness in your full licence preparation so you can seek further help or advice and address any gaps before you apply. Click here to view
Self-assessment tool – Cyber security and business continuity planning
Planning for all types of risk is an essential part of any business. As a financial advice provider, clients rely on you to ensure their information is secure, confidential, and available at all times. By taking the time to prepare for the unexpected, you’ll be able to get back on your feet quickly, protecting both your clients and your business. Use this self-assessment tool to see if you’re ready to complete the cyber security and business continuity planning section of your Class 1 or Class 2 FAP full licence application. It should help you identify areas of strength or weakness in your full licence preparation so you can seek further help or advice and address any gaps before you apply. Click here to view
Self-assessment tool – Key outsourcing arrangements
As a small business, we expect you’ll need to outsource some functions to third parties. It’s important that you protect your reputation and your clients by conducting robust background checks, putting contractual agreements in place, and performing regular reviews to ensure suppliers of key functions are up to the task and can meet your expectations and Financial Advice Provider (FAP) obligations. As a FAP, you remain responsible for any functions that you outsource. Click here to view
Self-assessment tool – Customer care – managing conflicts of interest
As a financial advice provider, you have a duty to give priority to your clients’ interests. It’s part of good governance to ensure that any conflicts of interest that do arise are quickly identified and managed so that your clients’ confidence and trust in you is maintained. Use this self-assessment tool to see if you’re ready to complete the customer care – managing conflicts of interest section of your Class 1 or Class 2 FAP full licence application. It should help you identify areas of strength or weakness in your full licence preparation so you can seek further help or advice and address any gaps before you apply. Click here to view
Bring in the Experts webinars with the FMA
(You will need your member login to view these webinars)
101 – How to obtain a Financial Advice Provider (FAP) licence
This webinar is designed for sole advisers and will take you through the process of obtaining a full FAP licence step by step. It discusses the policies and processes you need to have in place to comply with the FMC Act and regulations and the criteria you’ll need to meet to be ready to apply for a full licence.
Overcoming barriers to obtain your full FAP licence with the FMA
The FMA outlines an action plan designed to help you make a start in applying for your Class 1 or Class 2 Financial Advice Provider (FAP) licence. The action plan sets out 8 clear steps needed to apply. You will hear ideas on how to use it to check your progress now and identify the steps you still need to complete.
Fees and levies
The cost of a full licence and ongoing annual levies will vary based on how you choose to operate in the new regime. For more information on fees and levies, see MBIE’s website.
Filing an annual confirmation
To remain registered as a financial service provider (FSP) you must confirm your FSP’s details and services each year. Find out how to file your confirmation online, or to change the month you do it here.
What you need to know before you begin filing
Go to Before filing your annual confirmation – scroll down to ‘How to file an annual confirmation’ and ‘Schedule of fees and levies’
Additional useful information on Annual Confirmations and FMA Levies – April 2021
Click here to view
Disclosure requirements and standard conditions
Link to the standard conditions for full Financial Advice Provider licences.
FSPR changes to how FAPs engage with financial advisers
As of 26 October 2022 there are some changes to the FSPR as to how Financial Advice Providers engage with financial advisers. Refer the these step-by-step guides for registering on the FSPR.
Step by step guide for financial advisers looking to engage with a financial advice provider
Step by step guide for financial advice providers
Key decisions to make before you can apply for a licence
There are three ways you as an adviser can provide advice in the new regime;
1. Your business can apply for a FAP licence.
2. Your business can become an Authorised Body working under another business’ FAP licence (If they agree to this. As they will be liable for your breaches, FAPs are likely to be selective in order to minimise their risk)
3. You can apply for a FAP licence in your own name. Note: You will not be able to call your self a financial adviser, you will become a financial advice provider. You will also be personally liable for any breaches under the new regime.
What you will be asked during the Application Process
Below is a summary of information that will be asked during the application process. This information and more is available from the FMA here)
What’s your Financial Service Provider (FSP) number? This is the number associated with your registration on the Financial Service Providers Register. If you have more than one FSP number (an individual and business FSP for example), it’s important you enter the FSP number that will hold the licence.
Will you engage authorised bodies? An authorised body is an entity named on your licence that can provide the licensed service without needing their own licence. All authorised bodies named on your licence must register on the Financial Service Providers Register as a financial advice provider. You, and the authorised body, are responsible for the authorised body’s conduct, advice and actions, and ensuring they meet all market services licensee obligations. Answering yes to this question will trigger questions about the authorised body you would like to name on your licence.
What regulated financial advice will you provide to retail clients? You will be asked what type of financial advice you plan to give in the new regime. You will be asked to select from: investment planning services, financial advice on financial products, switching funds within a managed investment scheme (including KiwiSaver). Only select the options you know apply to you. Don’t indicate options just in case you might expand your offering in future.
Which financial advice products will you provide regulated financial advice to retail clients on? You’ll be asked which financial advice products you plan to give advice on in the new regime. You should only select the options you know apply to you. Don’t indicate options just in case you might expand your offering in future.
How will you provide regulated financial advice to retail clients? FMA need to know the number of all individuals you will engage directly under your financial advice provider licence and/or all individuals you will engage indirectly through another business, such as staff at another business’s call centre. If you do not know the exact number of advisers, please provide an estimate. If none, enter zero. You will also be asked if you will be providing advice through a digital advice facility. A digital advice facility provides automated regulated financial advice through a computer program, using algorithms (with or without the involvement of any individual).
Will you provide regulated financial advice to another business’s retail clients on their behalf? Answer yes if you will provide advice on behalf of anyone else. For example, if you are a call centre, your staff may provide advice on behalf of another licensed financial advice provider. You can only provide regulated financial advice to another financial advice provider’s retail clients if you have an existing agreement in place with them, before 8 April 2019, allowing you to do this, and they have their own financial advice provider licence or they are an authorised body under a licence.
Will another business (or its staff) with a financial advice provider licence provide regulated financial advice to retail clients on your behalf? Another business can provide regulated financial advice to retail clients on your behalf only if: you have an existing agreement in place with them, before 8 April 2019, allowing them to do this, and they have their own financial advice provider licence or they are an authorised body under your licence.
Authorised bodies’ details. These questions will only appear if you indicated you intend on having authorised bodies. For each authorised body on your licence you will be asked;
– What is the authorised body’s FSP number?
– What regulated financial advice will the authorised body provide to retail clients?
– Which financial advice products will the authorised body provide regulated financial advice to retail clients on?
– How will the authorised body provide regulated financial advice to retail clients?
– Will the authorised body (or its staff) provide regulated financial advice to retail clients on your behalf?
– Will another business (or its staff) provide regulated financial advice to the authorised body’s retail clients on its behalf?
Fit and proper questions. For entities – You will be asked for details about criminal convictions relating to your senior managers or directors and regulatory action relating to you or your authorised bodies. For individuals. You will be asked for details about any criminal convictions and regulatory action relating to you as the applicant.
Membership enquiries
Financial Advice New Zealand is a professional membership organisation for advisers working across all areas of financial advice, including mortgages, insurance, investment and financial planning. Talk to us today about joining.