A new financial advice regime - legislation available on Westlaw New Zealand
- Financial Advisers Act 2008 and associated regulations and notices have been repealed (see Financial Services Legislation Amendment Act 2019, s 97).
- The Financial Markets Conduct Act 2013 has a new financial advice and financial advice services regime overview section (s 431A).
- Financial Services Legislation Amendment Act 2019 provides for licensing and oversight of financial advice services and financial advice providers through changes to the Financial Markets Conduct Act 2013 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008. See especially the following changes to the Financial Markets Conduct Act 2013 :
- new and amended definitions, including for financial advice and financial advice service and financial advice product;
- new subpt 5A of pt 6 covering “additional regulation of financial advice and financial advice services” (formerly the financial adviser regulatory regime in the now repealed Financial Advisers Act 2008);
- new subpt 5B of pt 6 covering “regulation of client money or property services” (formerly the broker disclosure and conduct obligations regime in the now repealed Financial Advisers Act 2008);
- amendments to pts 8 (“enforcement, liability and appeals”) and 9 (“regulations, transitional provisions”);
- amendments to the schedules, notably pt 6 in sch 4 (transitional licensing) and a new sch 5 “other provisions relating to financial advice services and client money for property services”, including a new code of conduct).
- Financial advice providers — individuals or entities that provide a “financial advice service” — must be registered on the Financial Service Providers Register (FSPR).
Anyone who provides advice to retail clients, also must either:
- hold a Financial Advice Provider licence; or
- be an authorised body under somebody else’s Financial Advice Provider licence.
Registration on the Financial Service Providers Register will be available only to those providing services to New Zealand clients.
- Licensing is being introduced in two phases: transitional licences (valid for two years from 15 March 2021) and full licences (must be held by 16 March 2023 to continue to provide advice under own licence).
- Anyone giving advice to retail clients is subject to a new Code of Professional Conduct for Financial Advice Services; this includes nine standards that must be met.
- New disclosure rules apply. Certain information must be disclosed to clients to ensure clients can make informed decisions. This includes fees charged and if a financial adviser will receive commission.
Subscribers to Financial Markets Law on Westlaw New Zealand can find a detailed list of Acts, Regulations and Notices affected by the coming into force of the Financial Services Legislation Amendment Act 2019 on 15 March 2021 in What's new.