FAP programme inches forward

The FAP licensing programme is inching forward but is still making slow progress.

Monday, July 25th 2022, 8:15AM 4 Comments

by Eric Frykberg

Just over a third of the approximately 1800 financial advice providers in the country either have a full FAP licence or are in the process of getting one, according to the Financial Markets Authority (FMA).

The deadline to get an application in is September 30th, and no adviser who has not had a licence approved by next March will be allowed to do business.

“As at July 18, 663 FAP licences have been approved or are in progress,” the FMA said in a statement.

“That means 36% of providers are now operating under or have applied for their full licence. That percentage increases to 64% when taking into account those on the Financial Service Providers Register who have registered for the service but are yet to formally apply.”

The FMA added that the majority of banks and insurers reached the target date to submit their applications, indicating the industry was “committed to a smooth transition to full licensing”.

Many well established mortgage advisers were fully licensed months ago, saying it was just part of the job they needed to get done.

But smaller operations, especially one-man-bands, are dragging their feet. Anecdotal comment suggests many are using this as cue to leave the business, saying the FAP programme is the latest but probably not the last bureaucratic burden that will weigh down their business.

However the FMA has redoubled its efforts to reach these people, with roadshows and even phone-ins to provide assistance.

Tags: FMA

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Comments from our readers

On 25 July 2022 at 1:08 pm LNF said:

Detail that is not mentioned is how many advisers have been deregistered since 2019 / 2020 - the hurdle prior to this

On 26 July 2022 at 9:38 am Jonny Good Guy said:

Of course, the banks have completed the work they don't have to do anything that we have to
and they have lots of people and money
And never give advice

On 26 July 2022 at 1:58 pm JeffQV said:

There is no reason not to complete the application. It is not hard or onerous, just takes time and the required documents need to be held by the Adviser, they are not requested as part of the application. Just do it.

On 26 July 2022 at 4:22 pm Eyeinthesky said:

@JeffQV : The application is easy. Having the documents backing it up isn't overly onerous either depending on how you did this. Having the systems and processes that you use, matched to the documents and application, and matching licensing requirements are a little more involved. I had this very discussion a while ago with someone who was rushing through his application until I mentioned a couple of those points and asked how he approached some of the issues. He then took pause. Anyone who has not taken this very seriously may rue that decision in time.

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