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New financial advice regime

Improving access to quality financial advice for all New Zealanders

The Government is proposing to make changes to how financial advice is regulated in New Zealand. The aim is to improve access to high-quality financial advice for all New Zealanders.

If you’re a business or individual offering financial advice and investment planning services, these changes affect you.  

End of year update

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What is happening now

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What’s changing

If the proposed changes go ahead:

  1. The three current adviser types (Authorised Financial Adviser, Registered Financial Adviser and QFE adviser) will be removed and all advisers will need to meet the same standards.
  2. The distinction between ‘class advice’ and ‘personalised advice’ will be removed.
  3. The distinction between ‘category 1’ and ‘category 2’ products will be removed.
  4. The requirement that advice can only be provided by a natural person will be removed.
  5. The Financial Advisers Act 2008 will be repealed.

What this means

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When changes come into effect

Below are the various steps that must happen to implement the proposed changes. For indicative dates, see MBIE’s timeline.

August 2017

Financial Advice Code Working Group begins developing new Code of Conduct – (this started in August 2017).

December 2017

Bill referred to the Economic Development, Science and Innovation Committee.

February 2018

Submissions on the Bill closed.

July 2018

Select Committee report due.

Step 3

Bill passed.

Step 4

New Code of Conduct is approved by the Minister of Commerce and Consumer Affairs. New regulations are developed, consulted on and finalised.

Step 5

Transitional licensing opens. We will be accepting applications for approximately six months.

Step 6

Full licensing opens six months after transitional licensing opens.

  • Transitional licences come into effect and all financial advice providers with retail customers must now hold a transitional licence. A transitional licence is valid for up to two years and enables financial advisers and nominated representatives to continue providing the advice they were legally able to provide before the new regime was introduced. This gives you time to meet any new competence, knowledge and skills standards needed.
  • To continue providing advice, all financial advisers and nominated representatives must be engaged by a financial advice provider with a transitional licence.
  • New regime and new Code of Conduct comes into effect.
  • All new obligations and duties apply.
  • Competency exemption comes into effect. You can continue providing the advice you were legally allowed to provide before the new regime came into effect while you work towards achieving the new competency standards.
  • You can now apply for a full licence.
  • Financial Advisers Act repealed.
  • FMC Act and FSP Act amended to reflect new regime (to the extent not already done).
Step 7

After two years, the transitional licence period ends, all remaining transitional licences expire and advice can no longer be provided under a transitional licence. If you’re a financial advice provider, you must have a full licence to continue providing financial advice. If you’re not applying for your own licence, you must be engaged by a licensed financial provider who covers you under their licence. The competency exemption also expires and you must meet the competency requirements under the Code of Conduct.

What you can do now

  1. Subscribe to our alerts and follow us on LinkedIn so you’re up to date with latest information about the changes.
  2. Look out for invites to various events over the next few months, where we will present more information about our proposed licensing approach.
  3. Think about what these changes mean for your business and clients:

- Consider what the changes mean for your medium - and long-term business plan.
- Identify and engage the best resources to help you with your decision-making – including your professional adviser association, product providers and legal adviser.
- Begin formalising business processes and procedures, and continue your learning and development.

Our role

Parliament is currently considering changes to how we regulate financial advice in New Zealand. A number of government agencies are involved in this process. Below we outline which areas each of us is responsible for.

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Frequently asked questions

You’ve been asking us lots of questions about the proposed changes. Here we provide answers to some of the most common questions we’ve been receiving at various conferences, forums and meetings. We plan to update these FAQs over time, so if you can’t find the answer you need, please email questions@fma.govt.nz.

Useful information

Keep up to date with latest news on the proposed changes by visiting the Ministry of Business, Innovation and Employment’s website.

For details on how the Bill is progressing, visit the Parliament website.

To register on the Financial Service Providers Register visit the Companies Office website.

To find out what qualifications or skills you need to comply with the new code of conduct, visit the Financial Advice Code Working Group website. You can also subscribe to their updates.

For information about training options available to you, we recommend you contact The Skills Organisation on 09 525 2590 or at support@skills.org.nz.

To ask us a question or give us feedback, email questions@fma.govt.nz or call us on 0800 434 567 (+64 3 962 2698 if calling from overseas).

Understanding the jargon

There are many technical terms used to describe the proposed changes to how we regulate financial advice. To help, we’ve created a list of some of the most common terms used. If we’ve missed a term you need help understanding, email questions@fma.govt.nz or call us on 0800 434 567.