FMA says they should “cast their net in many directions” before making a decision
The FMA is urging advisers to “make informed decisions” when choosing how to license themselves, and to make full use of the information provided by MBIE, the Companies Office and various industry bodies.
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 different types of businesses.
John Botica, director of market engagement at the FMA says advisers should “think through their options clearly” when deciding which class of license would work best for them, and to carefully research any firms they may be planning to join.
Read more: FMA opens consultation for full license conditions
“We often talk about giving clients and consumers the right information at the right time to allow them to make informed decisions around their future wellbeing, and advisers too should be doing the same,” Botica said.
“I really encourage them to cast their net in many directions, from understanding the new regime to talking to MBIE and the Companies Office, and to us at the FMA.”
“Talk to your professional associations such as Financial Advice New Zealand, as they’ve developed some comprehensive licensing kits,” he continued.
“And don’t forget to talk to the providers of the products that you consider when giving advice. What they are thinking for the future, what their expectations are of you in the new regime – but more importantly, what your expectations are of them. Don’t make decisions in a vacuum, check all your bases and do your due diligence on firms who may be asking you to join their team.”
Read more: Adviser license classes welcomed by industry body
Botica says the FMA is seeing a lot of single adviser structures coming through in the transitional licensing phase, and the majority have opted to license their business as an ‘entity’, which is then responsible for them as an adviser.
He says he has also seen applications for more complex structures, including advisers registering themselves on the FSPR while also being linked to a larger provider. However, he says the bulk of applications have been for medium-sized firms engaging 2-20 advisers.
“As of Friday 12 June, 846 transitional licenses have been approved or are under assessment,” Botica said.
“These account for 5,855 financial advisers and 6,528 nominated representatives.
“Single adviser businesses form 46% of the total number of licenses, and 49% are firms which have between 2-20 advisers. 5% have 20+ advisers.”
