Last updated 12 June 2020
Licensing as a financial advice provider
There will be different ways to be licensed as a financial advice provider. What you need to do to prepare for the new regime depends on how you or your business wants to be structured.
- You can be licensed as an individual (holding a licence in your own name)
- You can be licensed as a business (holding a licence in the company’s name), or
- A licence may also, if allowed in its conditions, authorise one or more named entities (as authorised bodies) to provide a financial advice service covered by the licence.
Any of these financial advice provider types can engage with financial advisers.
The Financial Markets Authority (FMA) have created an online tool that can help you navigate your options and provide straightforward examples of how you can move forward.
It is important to note that the tool does not cover all possibilities, and more complex business arrangements that may apply to larger organisations are not included.
Authorised financial advisers and registered financial advisers
The categories of authorised financial advisers (AFAs), registered financial advisers (RFAs) and qualifying financial entities (QFEs) will also be replaced with the new categories of:
- financial advice providers
- financial advisers, and
- nominated representatives.
Financial advice providers
A financial advice provider is a business or individual providing advice to retail clients. All financial advice providers must be registered on the FSPR, and financial advice providers who provide financial advice to retail clients must also be licensed by the FMA.
A financial advice provider can provide advice directly, and/or through financial advisers and nominated representatives (see below).
If you are thinking about acting as a financial advice provider in the new regime, you can learn about registering yourself or your business on the FSPR now. Next you will need to apply for a transitional licence with the FMA through their online portal.
Financial advisers are individuals that give regulated financial advice to retail clients on behalf of a financial advice provider. They must be registered on the FSPR and ‘engaged’ by a licensed financial advice provider.
Those currently listed on the FSPR as an ‘authorised financial adviser’ or a ‘registered financial adviser’ will be automatically reclassified on the register as a ‘financial adviser’ when the new regime begins.
You will need to be engaged by a licensed financial advice provider through the FSPR when the new regime begins, in order to dispense advice (exact details on how to do this on the FSPR will be released in the coming months). If you are not engaged within the first 3 months of the new regime, you will be de-registered.
If you are intending to act as a financial adviser that is engaged by a financial advice provider, we recommend that you make sure that your information on the FSPR, including contact details, is up to date.
Nominated representatives are engaged by a licensed financial advice provider to give advice on their behalf. Nominated representatives do not need to be registered on the FSPR, but the licensed financial advice provider must limit the nature and scope of the advice its nominated representatives can give.