The FMA has set out the steps to the new adviser regime, the sequence of events for passing of the legislation through to development of the Code of Conduct and Regulations, including transitional arrangements, is as follows.
August 2017
Financial Advice Code Working Group begins developing new Code of Conduct – (commenced August 2017)
December 2017
Bill referred to Select Committee
Step 3
Bill passed
Step 4
New Code of Conduct approved by Minister, new regulations developed, consulted on and finalised
Step 5
After the new Code of Conduct is approved, there is a three month period before transitional licensing applications open for financial advice providers. Transitional licences, when granted, will allow FAPs, and all financial advisers and nominated representatives engaged/employed by them, to continue providing financial advice during the two-year transitional period.
Step 6
Full licensing opens six months after transitional licensing opens.
All financial advice providers must hold a transitional licence
To continue providing advice, all financial advisers and nominated representatives must be engaged/employed by a financial advice provider with a transitional licence
New regime and new Code of Conduct comes into effect
All new obligations and duties apply
Competency exemption comes into effect. If financial advisers or nominated representatives have not met the new competency standards, they may provide the advice they were legally allowed to prior to the new regime coming into effect while they work towards achieving the new competency standards
Full licensing opens
Financial Advisers Act repealed
FMC Act and FSP Act amended to reflect new regime
Step 7
After two years, the transitional period ends. All financial advice providers need to have a full licence to continue providing financial advice.
FMA role
We will be responsible for licensing and monitoring all financial advice providers. We’ve started engaging with industry to help people understand what they may need to do to prepare, and we plan to continue this over the coming months.
We will provide more information as soon as we can about licensing and our approach to ongoing monitoring and supervision.
Five things you can start doing now
Find out about the key elements of the new regime and the indicative timeline for key milestones
Think about what these changes may mean for your business and clients– ie opportunities and challenges
Consider your medium - long term business plan. What does this mean for any succession planning? (a succession plan is essential if you’re thinking of selling or taking a back seat role).
Identify and engage the best resources to help you with your decision making, - this may include your professional adviser association, product providers, legal adviser etc
Begin formalising business processes/procedures and continue your learning and development
