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FMA Reports Steady Progress on Financial Advice Transitional Licensing

FMA - Financial AdviceThe Financial Markets Authority (FMA) has said preparations for the new financial advice regime continue to progress despite the disruption caused by COVID-19.

The regulator has approved almost 800 transitional licence applications, representing around 5,500 financial advisers — well over half the estimated number of advisers in New Zealand.

New applications are still being received daily, and the FMA is approving these at a steady rate. The Government has delayed the start date for the new financial advice regime by more than eight months to no earlier than March 2021, to allow advisers to focus on helping clients, customers and families during COVID 19.

FMA Director of Market Engagement John Botica said the current Covid-19 situation shows how vital financial advisers are.

“It’s been encouraging to see a number of financial advisers demonstrating the value they bring to their clients. 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.”

It is expected that the Government will announce the new start date of the regime later this year, with plenty of advance notice. Advisers and providers can continue to plan for a start date in early 2021.

Financial advice providers that have successfully applied for a transitional licence don’t need to reapply. 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,” Mr Botica said.

“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.”

Separately, in June the FMA will begin consultation on the standard conditions for full Financial Advice Provider licences and more information will follow.

Mr Botica said the full licence application process will be completely online and it will be an expanded version of the transitional licence process.