Unlicensed advisers need a contingency plan: FMA

One week out from regulation change the FMA is asking for unlicensed advisers to have a contingency plan, especially with the FSPR not operating at full capacity.

Tuesday, March 9th 2021, 6:52AM

Many in the industry have their transitional licences. But those without may have found their time has run out early.

Changes to the FSPR requires that it goes out of action from now until March 15. This may cause issues for advisers who need to facilitate a speedy transition.

The FMA has told Good Returns “If you have not yet received a confirmation [of a transitional licence] we recommend having a contingency plan in place, this may include having another financial advice provider support your clients.”

The regulator adds, “With only a week before the start date of the new regime there is a risk that applications may not be able to be processed in time for March 15.

“If any financial advice provider hasn’t received written confirmation that their transitional licence has been granted by March 15, 2021, any persons intending to operate under that licence must temporarily stop providing advice until you receive that confirmation.”

Despite the cut off date for the new regime coming in a week, time has already run out for any advisers not yet licensed.

The difficulties in making a smooth transition have been made more apparent by changes to the FSPR.

Rob Rendle, national manager business registries, at MBIE told Good Returns “From 2-15 March, services on the Financial Service Providers Register (FSPR) are limited while we update the register to reflect the changes in the new financial advice regime and other new legislative requirements.”

Rendle adds “During this time we have a manual process that allows people to register their intention to apply for a transitional financial advice provider licence.”

Although it is clear from FMA comments that intention to apply for a licence and having a licence are very different things.

The FMA have said it “will be keeping a close eye on the transition process through the FSP register with anyone found operating outside of the law likely to face enforcement action”.

This is backed up by the recent case of a director who abused the FSPR system brought to prosecution by the FMA last week.

Tags: FMA FSPR MBIE regulation