Release of data follows start of new financial advice regime
The Financial Markets Authority (FMA) has released transitional license numbers to reveal how many financial advice providers are operating in New Zealand, in line with the new financial advice regime that came into force on March 15, 2021.
FMA’s infographic revealed over 3,000 financial advice businesses in New Zealand (comprising 1,807 financial advice providers and 1,200 authorised bodies), engaging 10,743 financial advisers and 12,287 nominated representatives.
Under the new financial advice regime, financial advice providers and advisers must have a transitional licence and be 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.
Commenting on FMA’s statistics, FMA director of market engagement John Botica said: “These statistics provide a snapshot of the financial advice sector and 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.”
According to the FMA, personal risk insurance (such as life insurance) accounted for 70% of financial products that advisers have indicated they provide advice on, followed by KiwiSaver (48%) and mortgage products and consumer credit contracts (37%).
Over half of financial advice providers are based in Auckland, although these businesses may have advisers throughout the country. The next region with the most financial advice providers is Canterbury.
Botica said it is crucial to formally record details of the financial advisers by linking to them on the Financial Services Providers Register (FSPR). He warned that those who are not linked to a financial advice provider by June 16, 2021 may face deregistration.
Full instructions about the linking process are on the Companies Office website.