The Financial Markets Authority – Te Mana Tātai Hokohoko (FMA) has reported further growth in New Zealand’s licensed financial advice sector and a marked increase in digital advice, with flow-on effects for insurers, intermediaries, and advice groups. In its second annual review of regulatory returns from licensed financial advice providers (FAPs), covering July 1, 2023, to June 30, 2024, and July 1, 2024, to June 30, 2025, the FMA records a 10% rise in licensed FAPs, from 1,410 to 1,553. Over the same period, the number of individual financial advisers increased by almost 9% to 9,197.
The structure of the market is split between small and large entities. Around half of all FAPs have a single adviser on their licence, while three licensees each have more than 500 advisers. For insurance providers and distributors, the figures indicate a market that includes both one‑person practices and large advice networks within distribution strategies. Clare Bolingford, the FMA’s executive director for licensing and supervision, said the returns inform how the regulator targets its activity. “Regulatory returns are essential for the FMA, so we can focus our regulatory effort where the risks and opportunities are greatest. We also want financial advice providers to benefit from the summary of these returns, so they can drive improvement into their own business. The continued growth in adviser numbers, alongside the rapid increase in the uptake of digital advice, shows how the sector is evolving,” Bolingford said.
According to the analysis, more clients are being served via automated tools that deliver regulated advice. The FMA estimates that the number of clients who received digital advice rose by about 90% in a year, from roughly 86,500 in 2024 to more than 164,800 in 2025. Over the same period, the number of FAPs stating they operate digital advice facilities increased by 21%. For the purposes of the regulatory return, a digital advice facility is defined as a system that generates financial advice automatically using algorithms, based on information a client supplies via a website or mobile app, without direct human input at the point the advice is produced. Human advice given over digital channels, such as video calls, is not included in this category. For insurers and advice firms using automated or hybrid advice models, this definition shapes how activity is reported, particularly where the advice process leads to product acquisition or replacement business. The FMA expects FAPs to record cases where a client acquires a financial advice product through a digital facility, including instances where existing life or general insurance policies are replaced.
The FMA reports that the total number of complaints received by FAPs was lower than in the previous year. At the same time, a larger proportion of complaints was referred to dispute resolution schemes, and the number of complaints upheld by those schemes fell substantially. Almost all complaints were resolved within three months. Bolingford said firms can use complaints information as part of their oversight frameworks. “Complaints give providers critical insights into where things can go wrong, what can be improved, and how firms can strengthen their systems to ensure better consumer outcomes,” she said.
The regulator has restated that, for regulatory return purposes, only complaints that relate to the financial advice service itself or to the complaints-handling process, and where a response is expected, should be included. Complaints about product manufacturers, or about matters not connected to advice or complaints handling, should not appear in the return even if they are logged internally. To clarify reporting where there were no complaints in a period, the FMA has updated the online form so that licensees can select a “No complaints” option rather than choosing a complaint category.
While compiling the latest report, the FMA identified errors and omissions in some returns and has responded with further guidance on how questions should be answered. “Accurate and timely regulatory returns are a regulatory requirement. We depend on high‑quality data from these returns to effectively oversee advisers, ensure they meet their obligations, and support fair outcomes for consumers,” Bolingford said.
The FMA has adjusted its guidance and the form in several areas:
The FMA has also reminded licensees that activities and outsourcing arrangements of authorised bodies operating under a FAP licence should be captured in the FAP’s return, and that only New Zealand‑domiciled clients should be counted in client numbers.
For insurance advisers, dealer groups, and insurers that work with FAPs, the findings indicate several areas of attention in advice and compliance frameworks:
With the FMA indicating that it will continue to use regulatory returns to inform supervision activity, insurance market participants can expect ongoing attention to data quality, advice models, and the use of technology in advice delivery.
