Financial Advice New Zealand has welcomed the FMA’s announcement of three different license classes for financial advice providers, and says the decision will be particularly good news for small adviser businesses.
The FMA released its consultation document for full licensing this week, and advisers have until 5pm on Friday 7 August to submit their feedback. The document outlines the eight conditions being considered for obtaining a full license, and suggests three different license classes for sole advisers, financial advice providers and nominated representatives.
Read more: FMA opens consultation on full license conditions
Commenting on the FMA’s consultation document, chief executive Katrina Shanks says the idea of difference licenses to suit different types of businesses will be ‘widely supported’ across the industry.
“Financial Advice NZ supports a system that offers licences that fit the scale, size and different financial advice that businesses provide, be they for a single-adviser business, a multiple adviser business, or something more complex, such as a licensed FAP engaging multiple advisers as well as having nominated representatives,” Shanks said.
“This system will be beneficial to small businesses that do great work providing personalised financial advice to clients and who will have a system that’s fit for purpose.”
The Financial Services Legislation Amendment Act is due to come into force by March of next year, and the full regime will take effect two years later. Shanks says the long consultation period will be welcomed by advisers, and that four of the FMA’s eight conditions will be of particular interest to the sector.
Read more: FSC on licensing: “You don’t have as long as you think”
“It’s great the FMA has listened to what the sector has been saying on the standard conditions for full licences, and we will be particularly interested to see how standards in relation to outsourcing, business continuity, technology systems and professional indemnity evolve in this process,” Shanks said.
“It was also great for members to get a pat on the back from the FMA for the work they did through the COVID-19 lockdowns, acting as ‘an emotional fire breaker’ by supporting their clients and keeping them informed.”
Financial Advice New Zealand will be hosting a number of workshops over September, once the consultation has ended and any amendments have been finalised.