Some 66% of them now have, or have applied for, a full licence
Fresh statistics from the Financial Markets Authority (FMA) have revealed that 86% of financial advice providers have now embarked on – or completed – the full licence application process, showing the sector’s commitment to the new licensing regime that came into effect in March 2021 and allowed providers to operate under a transitional licence for the first two years.
Data from Sept. 20 revealed that 66% of financial advice providers are now operating under, or have applied to the FMA for, a full licence, while a further 20% have moved to register on the Financial Service Providers Register (FSPR) for the “financial advice provider-licensee-full licence” service but have not yet formally applied to the FMA for a licence.
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All transitional financial advice providers had been given until Sept. 30 to apply for their Class 1 or Class 2 full licences, to ensure all applications could be processed well before transitional licences expire on March 16, 2023.
“We are pleased the majority of transitional licence holders are choosing to step up and do the mahi required to apply for a full licence,” said John Botica, FMA director of regulation and operations. “This is a credit to everyone in the sector and will ensure New Zealand consumers can benefit from access to quality financial advice. The full licensing process is significantly more rigorous than transitional licensing, and we have kept an open mind about what proportion of advice providers would go on to complete the full licensing journey.”
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Botica noted that the advice sector seems to be undergoing some change with some providers choosing to become authorised bodies under another provider and smaller firms joining together.
“However, at this stage, we are not seeing any significant restructuring of the advice market – the smaller adviser firms remain prevalent,” he said.
As of Sept. 30, there were a total 1,750 licensed financial advice providers, both transitional and full. That’s a small reduction from the 1,800 at the start of the new regime in March 2021.
“We know there will be some applications right up to the wire, which we have actively warned against,” Botica said. “Advice providers yet to submit their applications are encouraged to do so as soon as possible to avoid the risk of not having a licence to operate by the March 2023 deadline.”
See how to apply for a full licence on the FMA website.