The Financial Markets Authority (FMA) has provided transitional licence numbers under the new financial advice regime, revealing how many financial advice providers are operating in New Zealand. It follows the start of the new financial advice regime last month.
An FMA infographic shows there are just over 3,000 financial advice businesses (comprising of 1,807 Financial Advice Providers and 1,200 Authorised Bodies), which are engaging 10,743 financial advisers and 12,287 nominated representatives.
John Botica, FMA Director of Market Engagement, 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.”
Of the financial products that advisers have indicated they provide advice on, personal risk insurance (such as life insurance) was the most prevalent at 70%, followed by KiwiSaver (48%) and mortgage products and consumer credit contracts (37%).
Geographically, just 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.
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Mr Botica said the next crucial step for financial advice providers is to ensure they formally record details of the advisers they’ve engaged by linking to them on the Financial Service Providers Register (FSPR). Financial advisers who are not linked to a financial advice provider by 16 June 2021 may face deregistration. Full instructions about the linking process are on the Companies Office website.
About the new financial advice regime
- The new financial advice regime came into force on 15 March 2021.
- Providers of financial advice and their advisers must now:
- 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.
- Provide the prescribed disclosures.
- Financial advice providers have a two-year transitional period, by the end of which they must hold a Financial Advice Provider full licence.
- The FMA is now accepting applications for full licences.