As of March 16, 2023, the transitional licensing period for Financial Advice Providers (FAPs) to obtain a full licence has ended in New Zealand. Every adviser is to have obtained their New Zealand Certificate in Financial Services (Level 5) version 2 by this date. The Financial Markets Authority regulates financial advice in New Zealand through the Financial Services Legislation Amendment Act 2019 and the Financial Markets Conduct Act 2013.
Licensed Financial Advice Providers are required to abide by various requirements and duties when providing financial advice:
- Comply with competency standards as a Financial Advice Provider (FAP) be it you providing advice directly or on behalf of another.
- Financial Advisers are required to adhere to competence standards by holding and attaining the equivalent of the New Zealand Certificate in Financial Services Level 5 (Core Strand + specialist strands)
- Depending on the financial advice a Financial Adviser supplies additional strands under NZFSC Level 5 would be required, which are: Investment; General Insurance; Life & Health Insurance; Residential Property Lending
- To bolster the knowledge and skills of a FAPs continued professional development as set down in the Code of Professional Conduct For Financial Services
- With competency and continued professional development in line with the requirements under the Financial Advice Code FAPs are required to treat customers fairly with integrity and conduct delivered professionally. Making certain that the financial advice delivered is understood and suitable for the client’s needs.
- Through disclosure statements and discussion be clear with clients as to the advice and the rationale of the advice they will be receiving and what products a FAP is authorised to advise on in compliance with the FMC Act and its regulations. This will ensure retail investor protections are in place.
- Your client’s interests must be at the forefront of your own as a FAP. This comes back to the suitability of advice and recommendations put forward by the FAP in the best interests of the client executed diligently and skillfully.
Procedures for Financial Advice Providers
Financial Advice Providers (FAPs) will now be obliged to have monitoring systems, processes and procedures in place to ensure the advice supplied is up to date and record-keeping of clients’ file information is safeguarded.
The purpose of the financial advice regime is to bring advice regarding financial products under one common piece of legislation through the Financial Markets Conduct Act 2013 and the industry under a common set of standards and professional conduct. Change and upliftment of the quality of financial advice and risk and compliance processes particularly when it relates to making better outcomes for clients will drive further opportunities for licensed FAPs.
Tyler Wren has an established all-encompassing banking, financial services and insurance team of recruiters who work across the industry as an example with Financial Advisers, Insurance Brokers and more specialist skill sets that focus on work in the Risk & Compliance areas of specialism. Projects with risk and compliance currently underway are assisting clients with their compliance assurance programmes, CoFi requirements, and Risk & Assurance needs.
Reach out to Gary Bloxham to find out more about the work we do as specialist recruiters in the banking, financial services and insurance industry.
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