Kiwibank and SBS near FAP licensing decision

Kiwibank and SBS Bank are close to deciding how they will treat financial advice provider licence holders under the new regulatory regime.

Wednesday, December 18th 2019, 6:40AM

The two banks are expected to work with adviser businesses holding their own FAP licence, and those working underneath an aggregator's FAP.

A Kiwibank spokeswoman said the bank intends to work with intermediaries "able to provide regulated financial advice under a FAP licence".

In a statement, the bank said: "Kiwibank currently has relationships with selected intermediaries (aggregators and mortgage adviser businesses). We are currently working through our requirements for these intermediaries within the context of the changing regulatory landscape. It is our intention to keep working with our selected intermediaries who are lawfully able to provide regulated financial advice under a FAP licence and meet any other requirements arising from the changes in the legislation."

Richard Cameron, acting chief risk officer of SBS, said the bank had not determined its "final position", but "will likely follow the approach whereby the adviser must be lawfully permitted to operate under their own FAP licence or under another entity’s FAP licence".

The banks are likely to follow ANZ's position. ANZ New Zealand wrote to advisers on October 17 to state it would "only deal with intermediaries who are lawfully able to provide regulated financial advice to retail clients either under their own FAP licence, or under another entity’s FAP licence".

While ANZ and BNZ have set out their stance on FAPs, the market is still waiting for ASB and Westpac to make their final call.

As the adviser sector heads towards full licensing next June, businesses will have the option of whether to become their own FAP, or operate underneath a group's. Large groups like Astute Financial favour advisers operating under a group FAP, while small groups like Newpark Financial, encourage advisers to form their own FAP.

Tags: Financial Services Legislation Amendment Bill Kiwibank SBS