The training wheels are off for the financial advice regulatory regime

  • Legal update

    17 March 2023

The training wheels are off for the financial advice regulatory regime Desktop Image The training wheels are off for the financial advice regulatory regime Mobile Image

Today the Financial Markets Authority (FMA) announced that the new financial advice regime has reached the end of its transitional licensing phase, and that licensing is now in full effect. 

A link to the media release is available here

Who needs to read it? Why?

The FMA will hold financial advice providers (FAP) to higher standards of conduct as the regime rolls out. It follows that FAPs should monitor the regime's progress as it comes into effect in order to lower their exposure to penalties for lack of compliance.

What is the importance of this?

The Financial Services Legislation Amendment Act was passed in 2019, and Michael Hewes, the FMA Director of Deposit Taking, Insurance and Advice, acknowledged “the considerable efforts of the thousands of New Zealanders who work in the financial advice industry, as well as those who represent them at professional adviser bodies, and our public sector partners at MBIE, the Companies Office, and the Code Committee” in getting the regime to where it is today. 

Mr Hewes also noted that they have been impressed by the willingness of advisors to adapt their businesses to meet the higher demands of this new regime. He believes this has led to a strengthening of the sector as a whole. The transitional period has been considered a success, and over 2,500 have either been directly licensed, or are operating as authorised bodies as of today. This group ranges from sole operators to large entities with multiple advisers. 

In June, the FMA will know the total number of advisers covered by full licences, once their details are linked to the registration of each licence holder on the Financial Service Providers Register.

What next?

The FMA’s focus is now turning to the monitoring and supervision of licensed advice providers, and the recently finalised questions for regulatory returns that licensees must file every year will be due in September 2024. If you have any questions in relation to the requirements of this regime and how to comply, please contact one of our experts. 


This article was co-authored by Elise Plunket, a Solicitor in our Financial Services team.