FMA breaks down the data

One month on from March 15, the FMA has shared a breakdown of the state of financial advice in New Zealand, and by the numbers the industry is looking strong.

Tuesday, April 13th 2021, 8:45AM

by Daniel Smith

Everything from consumer hysteria to an exodus of advisers had been predicted to follow the start of the new regime. But one month on data shared by the FMA shows the industry is in good shape.

An infographic provided by the FMA (pictured) shows there are just over 3,000 financial advice businesses (comprising 1,807 financial advice providers and 1,200 authorised bodies), which are engaging 10,743 financial advisers and 12,287 nominated representatives.

FMA director of market engagement, John Botica said that the statistics “highlight the continuing presence of small advice businesses, with 82% of financial advice providers being businesses with fewer than 10 financial advisers spread right across New Zealand.”

The data relating to the products advisers provide advice on revealed personal risk insurance was the most prevalent at 70%, followed by KiwiSaver (48%) and mortgage products and consumer credit contracts (37%).

The spread of FAPs corresponds with the population across the country. Just over half of financial advice providers are based in Auckland, although these businesses may have advisers throughout NZ. The region with the next most financial advice providers was Canterbury.

Botica noted a crucial next step for financial advice providers is to ensure they formally record details of the advisers they’ve engaged. FAPs are to do this by linking to them on the Financial Service Providers Register (FSPR).

Financial advisers who are not linked to a financial advice provider by June 16, 2021 may face deregistration.

Advisers who are members of the new regime must make sure they have a transitional licence and are able to comply with its standard conditions, comply with new duties under Part 6 of the Financial Markets Conduct Act 2013, comply with the new Code of Professional Conduct for Financial Advice Services and provide the prescribed disclosures.

The FMA are now accepting applications for full licences.

Tags: FAP Financial Services Legislation Amendment Act FMA FSLAA licensing new regime