No safe harbour for new advisers
The incoming Financial Services Legislation Amendment Bill requires all advice businesses to be licensed, starting with a transitional license, before full licenses are required two years later.
Transitional licenses allow a firm to continue to provide the type of financial adviser services they were able to provide under the current regime, without needing to satisfy any new competency requirements introduced by the new code of conduct.
The Ministry of Business, Innovation and Employment confirmed that a new adviser entering the industry between the start of transitional licensing and full licensing could join a firm with either a full or transitional licence.
“However, the new entrant financial adviser will not be covered by the competency safe-harbour; this means they will need to meet the relevant competence, knowledge, and skill standards as set out in the new Code of Conduct before they can give financial advice.”
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