1. Compliance
  2. Authorised financial advisers
  3. Your on-going obligations
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Authorised Financial Advisers

Your obligations

If you are an authorised financial adviser (AFA) you must comply with a number of obligations when providing financial adviser services. These include:

Register on time

You must annually renew your registration on the Financial Service Providers Register and notify the Registrar of changes. You must be a member of a dispute resolution scheme, if providing services to retail clients.

Meet your authorisation conditions

An AFA must comply with the terms and conditions of authorisation which will include:

  • standard conditions subject to any modifications that the FMA considers appropriate
  • terms and conditions specific to the AFA.

The standard conditions include requirements for the AFA to maintain an adviser business statement, provide an annual confirmation and to notify us of significant matters.

Variation of terms and conditions

Most terms and conditions will remain in place for the term of the authorisation. The conditions can only be varied during this time in the circumstances outlined below


Section of the Financial Advisers Act

On application by an AFA (if approved by the FMA)

s55A(1) and (2)

If they are reporting or accounting standard conditions. Changes are subject to consultation

s147A(3) and 147E

For other standard conditions, in limited circumstances, such as in response to an emergency or where necessary to avoid the defeat of the purpose of the Financial Advisers Act. Changes are subject to consultation

s147A(3)(a) to (e) and 147E

If the business of the AFA has changed in such a way that there is a material risk to consumers; and/or the AFA has been or is involved in market practices that are in material respects inconsistent with the purpose of the Act


On an AFA's default


If an AFA applies to renew their authorisation new terms and conditions may apply.

Follow theCode 

The Code of Professional Conduct sets out minimum standards and applies to all AFAs from the date of authorisation and while they remain authorised. Review a full copy of the Code here.

Tell your clients what's important

You must make both a primary and secondary disclosure when providing personalised services to retail clients. The principle behind disclosure is to provide the essential information your client needs to make an informed decision. It must not be misleading, deceptive or confusing. Any additional information you decide to provide to a client must not be misleading, deceptive or confusing either. For example, if you decide to provide accompanying information about your qualifications, make sure your client understands the relevance to the service they are considering.  Find out more on your disclosure obligations.

Continuing professional development

AFAs must meet certain minimum standards for continuing professional development. These are set out in Code Standards 17 and 18 in the Code of Professional Conduct for Authorised Financial Advisers.

AFAs have an obligation to be competent when they give advice (Code Standard 14) and must maintain and keep a current professional development plan for each CPD period.

The CPD requirements for AFAs are not prescribed in detail and are instead principles-based. An overarching principle of CPD is that an AFA has discretion to undertake professional training that best meets their individual needs. 

Update your adviser business statement (ABS)

The AFA ABS Guide was last updated in January 2015.  The main changes from the previous version of the guide have been to reflect recent changes to the Code and the addition of information regarding the eligibility criteria for AFAs providing Personalised DIMS under the Financial Advisers Act.  

Advisers providing personalised DIMS will need to ensure that their ABS contains all of the required information with respect to personalised DIMS.  All other advisers should be mindful of the changes brought about by the amendments to the Code when they next update their ABS.

Read the AFA adviser business statement guide.

Under the standard conditions of authorisation, AFAs must maintain a current written adviser business statement (ABS).  Each year, you must confirm to us that your ABS is current through the annual AFA information return.

You do not need to supply us with a copy of your ABS or specify any changes you have made to update your ABS.  However we may ask for a copy of an ABS at any time to assist in monitoring.

Make sure your advertisements are clear and true

A financial adviser must not advertise a financial adviser service in a way that is misleading, deceptive or confusing. This is in addition to the general requirement that a financial adviser's conduct in providing a service must not be misleading or deceptive (See sections 35 and 34 of the Financial Advisers Act (FAA).

If you’re a financial adviser, the fair dealing provisions of the FMC Act will apply to you. These are in addition to your obligations under the FAA.

These general obligations apply to all financial advisers including registered financial advisers. As well as traditional forms of advertising (e.g. radio, press, TV advertisements), advisers also need to consider whether messages on websites, business cards, signage and other communications  might be seen as an advertisement. This will depend on the particular wording involved and message conveyed.

AFAs have additional obligations relating to advertising. Under AFA standard condition 7 AFAs must not at any time state or imply the FMA has endorsed or approved the AFA's business, advice, or solvency, or any other agreements or business arrangements. 

However this does not prevent AFAs from factually disclosing or otherwise representing they are an AFA.  For example, AFAs can display their AFA certificate on an office wall or website or state on business cards that they are an AFA.

AFAs must also state on advertisements for financial adviser services that a disclosure statement is available on request and free of charge. (See section 30 of the FAA and the definition of advertisement at section 5).

Complete your AFA information return annually

The information return is a reporting requirement contained within the regulatory reporting guide (RRG). The RRG sets out the periodic and other reporting, accounting and notification requirements for AFAs as required under the standard conditions for AFAs.  

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