Adviser business and individuals, including mortgage brokers, now have a year to prepare and meet licensing requirements, with the new financial advice regime officially entering into force in June 2020.
According to government, the exact date will be determined by Order in Council in the coming months. Under the new regime, anyone who gives financial advice to retail clients will be required to operate under a licence granted by the Financial Markets Authority (FMA), with application fees ranging from $612 to $922 for a full licence, and $405 for a transitional licence.
Minister of Commerce and Consumer Affairs Kris Faafoi said. “We have several thousand financial advisers operating in New Zealand.
“Not only will this new regime level the playing field so they are all subject to the same rules and oversight it will increase the standard of financial advice across the board,” he added.
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The Cabinet has also agreed to make changes to the registration requirements for the Financial Service Providers Register (FSPR). These changes are expected to weed out some “unscrupulous offshore-controlled operators,” who registered on the FSPR to give the impression that they are actively regulated here.
Faafoi noted the FMA licensing regime and rules follows the passing of the Financial Services Legislation Amendment Act (FSLAA) into law and the approval of the code of professional conduct for financial advice services.
This is the latest strand in a suite of measures being delivered by the government to protect consumers, including measures to ensure that all financial advice is provided in the best interest of consumers, reforming contract law on insurance and revising credit laws to stop predatory and other lending not in the best interests of consumers.
“The government has been keeping a close watch on the Financial Markets Authority and Reserve Bank review of conduct and culture of banks and insurance companies,” the minister added. “The final report on banking is expected soon, but in the meantime I have progressed work on a number of measures so we can get legislation introduced to Parliament this year.”