Financial Services Legislation Amendment Act 2019 (FSLAA)

Summary

The Financial Services Legislation Amendment Act introduces changes to ensure the conduct and client-care obligations of financial service providers and the regulation of financial markets remain fit for purpose. It also addresses misuse of the financial service providers register by offshore entities. The changes are designed to:

• remove regulatory boundaries, such as the adviser classifications (AFA, RFA, and QFE), the distinction between ‘class advice’ and ‘personalised advice’ and category 1 and 2 products
• allow financial advice to be provided online as well as in person
• set industry-wide standards for conduct and competence.  

Licensing

To give financial advice to retail clients, individuals must now either hold a Financial Advice Provider (FAP) licence or be engaged to operate under a Financial Advice Provider’s licence as a Financial Adviser or Nominated Representative.

• You will need a licence if you want to be a financial advice provider (FAP) and provide advice on your own account to your own clients – for example, you run your own business. 
• You won't need a licence if you want to be a financial adviser or nominated representative who provides advice on behalf of another financial advice provider.

Download the Introductory guide to licensing requirements PDF to understand the process and what's required

Registration

To address misuse of the Financial Service Providers Register (FSPR), you will only be able to register as a financial service provider if you are providing services to New Zealand clients. This requirement aims to improve client confidence and protect New Zealand’s good business reputation both at home and abroad.

Go to the Financial Service Providers Register (FSPR) website

Standard conditions

Financial advice provider licences are subject to seven standard conditions, as well as conditions imposed by the FMC Act, the regulations, and any specific conditions imposed by the FMA.

View the standard conditions for FAP licences PDF

Code of Conduct

Anyone providing advice to retail clients is subject to a new Code of Professional Conduct for financial advice services. This outlines the standards of conduct, client care, competence, knowledge, and skill you need to meet when providing financial advice in New Zealand.

View the Code of Professional Conduct for financial advice services website

Disclosure requirements

You must disclose certain information to your clients to ensure they can make informed decisions.

View information about the disclosure requirements on MBIE’s website

The role of various Government Agencies

A number of Government Agencies are involved in the implementation and oversight of the Financial Services Legislation Amendment Act 2019 (FSLAA):

Financial Markets Authority

• Provides information on regulatory requirements, like guidance about the licensing application process
• Assesses and issues licences for financial advice providers
• Collects data, and monitors compliance and outcomes through ongoing supervision
• Takes enforcement action when needed.

Ministry of Business, Innovation and Employment (MBIE)

Considers and recommends regulations containing technical details to support the legislation. This includes:

• the disclosure requirements for those providing financial advice; and
• setting fees and ongoing levies.

New Zealand Companies Office

Registers relevant firms and individuals on the Financial Service Providers Register (FSPR).

Code Committee

• An independent group appointed by the Minister of Commerce and Consumer Affairs to prepare the Code of Professional Conduct for financial advice services.
• This sets out minimum standards of conduct, client care, competence, knowledge and skill.
• Reviews and recommends changes to the Financial Advice Code. 

Visit the Financial Advice Code website

Who needs a licence to provide financial advice

• You will need a licence if you want to be a financial advice provider (FAP) and provide advice on your own account to your own clients – for example, you run your own business. 
• You won't need a licence if you want to be a financial adviser or nominated representative who provides advice on behalf of another financial advice provider.

Read more about the Financial Advice Provider licensing process