New Zealand has introduced a new regulatory regime for financial advice. Anyone who gives regulated financial advice to retail clients must either hold, or operate under, a Financial Advice Provider licence.
All providers of financial advice are now subject to the same obligation to place the interests of their clients first and must adhere to a new Code of Conduct.
John Botica, the Financial Markets Authority's Director of Market Engagement, said that the new regime was the culmination of nearly five years’ work.
“More than 10,200 financial advisors have come into the new licensing system, with more than 1,700 transitional licences approved and nearly 1,000 authorised bodies. Anyone who is not operating under a transitional Financial Advice Provider licence will now need to apply for a full licence. The transitional period gives advisors two years to complete all the competence, knowledge and skill standards required under the Code of Conduct.”
Financial Advice NZ, the applicable trade body, has stated that the Financial Services Legislation Amendment Act "adds an additional level of trust in financial advice for the public."
Chief Executive Katrina Shanks said that it was the end of a long journey and that Financial Advice NZ was excited about what was coming next.
“Commerce Minister David Clark put it in a nutshell when he said the new regime will give consumers greater confidence to seek advice that will help with their financial goals, providing them with greater trust in the quality of that advice. The more than 10,000 financial advisors in the sector have been focused on ensuring they’re compliant with the new regime over the past 12 months.
“For some advisors this has meant they’re now operating under slightly different business structures. Some have had to make changes to the way they deliver advice, while others have gained further qualifications.”