Financial advice providers can give advice to retail clients in the following ways:
- Directly (for example, online)
- Through ‘financial advisers’
- Through ‘nominated representatives’ (who will have less discretion than financial advisers)
- Through an engaged entity (if permitted by the financial advice provider’s licence conditions)
The new Act dispenses with the classifications for advisers and advice firms (Authorised, Registered or QFE) and removes the distinction between ‘class advice’ and ‘personalised advice,’ and between ‘Category 1’ and ‘Category 2’ products.
The requirement for personalised advice to be given by a ‘natural person’ has also been removed, allowing for new and innovative ways of providing advice.
Protecting New Zealand’s reputation
The Act also addresses misuse of the Financial Service Providers Register (FSPR) by strengthening the requirements for offshore entities seeking to register.
Entities will only be able to register on the FSPR if they provide financial services to clients in New Zealand, or are required to be licensed or registered under other New Zealand legislation.
These measures will protect New Zealand’s international reputation as a safe place to conduct business.
Last updated 2 August 2019