New push to get advisers fully licensed

A new attempt to encourage advisers to apply for full licensing starts next week.

Monday, August 8th 2022, 2:13PM 7 Comments

by Eric Frykberg

It consists of a series of free workshops run by the Financial Markets Authority (FMA). They aim to guide financial advisers through the process of applying for Class 1 licences.

A Class 1 licence applies to sole operators.

The workshops are part of the FMA’s campaign to encourage financial advice providers to complete their full licence applications by the target date of September 30th.

This process is lagging way behind schedule.

The first online session is August 9 and it will be followed by five others.

The six breakfast sessions will be hosted by experts and are aimed to make the Class 1 application process easier to navigate.

The FMA says around half of New Zealand’s 1835 financial advice providers are smaller firms run by individuals.

“They really are the backbone of the financial advice industry,” said the FMA's director of market engagement, John Botica.

“These online sessions have been tailored to help them successfully prepare and apply for their full licence from wherever they’re based.

“For those who are uncertain about taking this next step, we hope that this programme of six webinars will act as a circuit breaker, giving them the confidence to proceed with their applications.”

Each of the six sessions covers a different section of the Class 1 application process. The full programme is:

Week 1: Making a start – getting the basics right
Week 2: Navigating the online form – outsourcing, BCP and cyber security
Week 3: Navigating the online form – competency
Week 4: Navigating the online form – oversight and conflicts of interest
Week 5: Navigating the online form – code of conduct, complaints, record keeping
Week 6: Finalising your application and getting ready to submit.

The FMA says it wants all applications in by September 30, otherwise it cannot guarantee to have them processed by the cut off date next March.

Tags: FMA

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Comments from our readers

On 8 August 2022 at 4:32 pm John Milner said:

What about providing an incentive of $1,000 for each new FAP and heavy penalties for those without a FAP by March 2023. We could call it the Luxon Induction. Just asking for a friend…

On 8 August 2022 at 5:59 pm LNF said:

This tells me the FMA think Class 1 advisers are not capable of doing this process

On 9 August 2022 at 10:15 am Matron said:

@FMA deserves bouquets (as opposed to brickbats) for their efforts to engage and encourage Advisers to get their full licence application in on time. If the numbers don't eventuate then it will be what it will be.

On 9 August 2022 at 2:59 pm Do what is right said:

Unfortunately, we will lose many very capable and competent advisers come March 2023. If we see the adviser numbers halve, how tough is it going to be for the people who require assistance?

There are tough times ahead for the general public as quality advice options are disappearing. As a country, it will not be good for us long term.

On 10 August 2022 at 3:44 pm Amused said:

Licensing of the financial services industry was supposed to be about improving the quality of advice that consumers receive. Instead, it’s looking increasingly like its legacy will be one of consumers access to quality advice been markedly reduced from March 2023 with many experienced advisers electing to exit the industry.

We can all argue about the various reasons why an adviser would choose not to become licensed, but the fact remains that many competent and ethical advisers will be leaving the industry next year when otherwise they wouldn’t be. The FMA can’t possibly claim this to be a success story for consumers. In fact it's a disaster.

Somewhere along the way a process that started with good intentions for the consumer ended up becoming highjacked by Government bureaucrats and education & compliance providers all of whom have turned licensing into an opportunity to create more money and jobs for themselves.

The consumer is been disadvantaged if their trusted adviser of many years now decides that there are easier ways to make a living or opts to retire early.

On 11 August 2022 at 10:27 am w k said:

@amused: 100% agree with you and i'm not the only one. furthermore, some wanted to raise the bar even higher in regards to qualifications.
i'll say again, higher qualification does NOT equal to better advisers. ethics and trustworthiness CANNOT be taught.

On 12 August 2022 at 9:01 am Ontheotherhand said:

It's not just clients and advisers that are victims, FMA is also somewhat of a victim. It's not the FMA who looked across the ditch and decided New Zealanders needed even more more complexity and expense with their financial advice. MBIE and the Code Committee have tagged to put in more barriers.

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