FMA hails progress on financial advice providers' licencing

FMA hails progress on financial advice providers' licencing | Insurance Business New Zealand

FMA hails progress on financial advice providers' licencing

The Financial Markets Authority (FMA) has said that it is “pleased” with the number of financial advice providers that have decided to undergo the full licence application process. According to statistics from the regulator, 86% of financial advice providers have started or completed the process.

As of Sept. 30, 66% of financial advice providers are now operating under, or have applied with the FMA for, a full licence. A further 20% of providers have registered on the Financial Service Providers Register for the “financial advice provider-licensee-full licence” service but have not yet formally applied to the FMA for a licence.

The FMA previously set Sept. 30 as the target date for all transitional financial advice providers to apply for their Class 1 or Class 2 full licences. The regulator said this was to help ensure all applications could be processed well before transitional licences expire on March 16, 2023.

“We are pleased the majority of transitional licence holders are choosing to step up and do the mahi required to apply for a full licence,” said John Botica (pictured above), FMA director of regulation and operations. “This is a credit to everyone in the sector and will ensure New Zealand consumers can benefit from access to quality financial advice. The full licensing process is significantly more rigorous than transitional licensing, and we have kept an open mind about what proportion of advice providers would go on to complete the full licensing journey.”

Botica said the FMA has observed some changes in the advice sector, with some providers choosing to become authorised bodies under another provider and smaller firms joining together.

“However, at this stage we are not seeing any significant restructuring of the advice market – the smaller adviser firms remain prevalent,” he said.

As of Sept. 30, the total number of licensed financial advice providers (both transitional and full) stood at 1,750 – slightly lower than the 1,800 at the start of the new regime in March 2021.

“We know there will be some applications right up to the wire, which we have actively warned against. Advice providers yet to submit their applications are encouraged to do so as soon as possible to avoid the risk of not having a licence to operate by the March 2023 deadline,” Botica said.