Despite disruption caused by the COVID-19 pandemic, the Financial Markets Authority (FMA) has said that applications for transitional licenses for the new financial advice regime continue to be received and approved at a “steady rate.”
Advisers had originally been rushing to get their transitional licenses to make a June 29 deadline. However, the government delayed the start date for the new financial advice regime to no earlier than March 2021 to allow advisers to focus on helping clients, customers, and families during the COVID-19 pandemic.
The FMA has already approved almost 800 transitional licence applications, representing around 5,500 financial advisers — well over half the estimated number of advisers in New Zealand.
“It’s been encouraging to see a number of financial advisers demonstrating the value they bring to their clients,” said John Botica, director of market engagement at the FMA. “The extension of transitional licensing deadlines was provided for exactly this reason and we’ve spoken with a number of advisers to hear how they are focusing on their clients’ needs and following the principles of good conduct through these difficult times.”
The regulator said that, while it expects the New Zealand government to announce the new start date of the regime later this year, financial advisers and providers can continue to plan for a start date in early 2021.
The FMA also stressed that financial advice providers who have successfully applied for a transitional licence do not need to re-apply. The transitional licence will take effect when the new regime starts and is valid for two years.
“In the meantime, we urge advisers who have not begun the transitional licensing process to continue to give careful thought as to how they will operate in the new regime,” said Botica. “Our options tool, website materials and resources from other government agencies have helped thousands of advisers navigate their options under the new regime. Generally, the feedback we continue to receive is that the transitional licensing process is straightforward and efficient.”a