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New licensing requirements for financial industry falling into place with six Qualified Financial Entities named to date

KiwiSaver
New licensing requirements for financial industry falling into place with six Qualified Financial Entities named to date

Licences for six of 80 organisations vying for status as Qualifying Financial Entities (QFEs) under new advisory regulation have been issued with the bulk expected to be cleared in the next two weeks.

The Securities Commission yesterday named ACM Insurance Ltd, AMP Services (NZ) Ltd, Farmers Mutual Group, Fisher Funds Management, Instance Finance NZ Ltd and  Spicers, as the first licensees under the new Financial Advisers Act, which officially takes effect on April 1.

Under the new regulatory regime, anyone dispensing financial advice needs to registered on the Companies Office Financial Services Provider Register.

The act further requires that financial advisers, or organisations that employee individuals who give investment advice, be certified as such.

Securities Commission director of financial adviser regulation, Mel Hewitson, said financial organisations licensed as QFEs assume the responsibility for ensuring their advisers are properly qualified and trained. She said the restoration of consumer confidence was a goal of the new legislation.

"Many New Zealanders get their advice on investments, insurance and mortgages from these organisations.  We want them to be confident they're dealing with an organisation committed to ensuring their advisers follow the new rules.''

An estimated 20,000 advisers will fall under the auspices of QFEs, according to the Securities Commission.

While the vast majority only deal with simple debt and insurance products, some QFE advisers handle more complex investment products, such as KiwiSaver.

While the Securities Commission will be replaced by the new Financial Markets Authority in May, Hewitson said the transitioning authority would be "working closely" with QFEs to "monitor how they are complying with their responsibilities.''

Financial advisers working on their own or through small businesses are also required to be registered on the Companies Office website as well as pass two sets of exams. (For further details see earlier article by Amanda Morrall.)

For interest.co.nz's interview with outgoing Securities Commission Director of Supervision Angus Dale-Jones, click here.

The key steps in the introduction of the new financial adviser regulatory regime are:

DATE REGULATORY REGIME REQUIREMENT
1 December 2010

All financial advisers must comply with the conduct obligations of the Financial Advisers Act 2008

All people and organisations providing financial services must be registered (except financial advisers who have until 31 March 2011)

1 April 2011 Financial Service Providers Act 2008 fully in force. Advisers providing financial services must be individually registered unless they are acting on behalf of a Qualifying Financial Entity (QFE)
1 July 2011 Financial Advisers Act fully in force. Only Authorised Financial Advisers can offer retail clients investment planning services, personalised financial advice or discretionary investment management services on complex products (unless they are acting on behalf of a QFE)

 

 

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