Guide to Financial Advice Provider licence requirements and application kit
Click here to view
Classes of financial advice service for full financial advice provider licence
Click here to view
Self-assessment tool – Record Keeping
Click here to view
Self-assessment tool – Cyber security and business continuity planning
Click here to view
Self-assessment tool – Key outsourcing arrangements
Click here to view
Filing your annual confirmation
- ‘Before filing your annual confirmation’ page – scroll down to ‘FMA levies – financial advisers and financial advice providers’
- On the ‘How to file an annual confirmation’ and ‘Schedule of fees and levies’
Useful information on Annual Confirmations and FMA Levies – April 2021
Click here to view
Ready, Set, Go! Pratical knowledge for the new regime
We delivered you a webinar series that will provide you and your adviser business the knowledge to ensure you are compliant for the new financial service regime which starts on the 15 March 2021.
Click here to view webinars under your membership account
Launch of FMA’s introductory guide to Full License Requirements
On Tuesday 17th November 2020 we had John Botica, Derek Grantham and other key members of the FMA licensing and supervision teams shared an overview of what you can expect from the Full Licensing Application process when it opens on 15 March 2021.
The disclosure requirements were also released late in June
Link to the full disclosure requirements – Financial Market Conduct (Regulated Financial Advice Disclosure) Amendment Regulations 2020
Link to the standard conditions for full Financial Advice Provider licences.
Link to the Guide for providers of Financial Advice Services – an introduction to Full Licence requirements
Transitional Licensing Support
Financial Advice New Zealand supports its members through the transitional licensing process and provides advice, tools and workshops to ensure advisers understand their obligations in the new regime.
Key Changes – March 15, 2021 onwards
Anyone providing financial advice to retail clients from 15 March 2021 will need to operate under a Financial Advice Provider (FAP) Transitional Licence. There are two phases to financial advice provider (FAP) licensing: transitional and full. A transitional 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 advisers time to meet any new competence, knowledge and skills standards needed.
If you do not get your transitional licence before 15 March 2021, you cannot provide advice to retail clients until you have a full licence – unless you provide advice under another financial advice provider’s licence.
Key decision 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.
Next Steps: Once you have completed the transitional licensing details on-line and clicked the “Pay Button” this will be the action which submits your transitional licence application to the FMA. You will receive a record of all the documents you have submitted and receive a receipt of the payment. It costs $465.75 (incl GST) to apply for a transitional licence, plus $44.56 (incl GST) per authorised body named on your licence application.
Once you apply for a transitional licence, it should not take more than a week to receive notification of whether it has been approved or if more information is required. All licences approved during the application period will appear on the Financial Service Providers Register from the first day of the new regime. This is when your licence will take effect.
FMA Levy Relief for Sole Advisers
When you register your company on the Financial Service Providers Register, the registration fees you pay include a Financial Markets Authority (FMA) levy of $460.00 (plus GST). However, new regulations offer relief from this levy for those who:
- rely on a sole-adviser exemption in the current regime, and
- have registered a company on the FSPR between 25 November 2019 and 28 September 2020 and indicated the company’s intention to apply for a transitional licence.
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.