Commerce Minister Simon Power has announced that advisers will be given extra time to fully comply with the new financial advisers regime.
While some deadlines remain in place he has extended others. The changes have been made in response to feedback from the industry.
All financial advisers will need to be registered and to have become a member of an approved dispute resolution scheme by December 1.
However, they will then have until June 30 next year, when the regime comes into effect, to complete any required training and have applications for authorisation and qualifying financial entity status processed by the Securities Commission.
"I have listened to the concerns of the industry about the importance of their being enough time for individuals and companies to go through the authorisation and education process.
"The industry has advised me this will give sufficient time for these elements to be completed.
"This regime is essential if we are to have a financial adviser sector which mum and dad investors and investment product providers can have confidence in."
Power said he expected to make further announcements soon on the treatment of advice to wholesale clients, generic advice often issued by institutions rather than individuals, and how the regime deals with group corporate structures.
ETITO Manager Strategy and Corporate Relations Michael Frampton says that financial advisers cannot delay meeting minimum standards of competence, knowledge and skills as required by the Code because of the extension in the deadline.
"Financial advisers need to see this extension as an opportunity to address any knowledge and / or practice gaps they might have," Frampton says.
"ETITO's self-evaluation tool has been used by nearly 900 advisers and indications are that nearly half of advisers are not ready for competence assessment."
"Advisers cannot postpone satisfying the requirements of Code."
"If they do not register with ETITO, plug any gaps in their competence and book assessment early, they still leave themselves open to the risk of running out of time. Advisers who book and undertake assessment early will almost certainly have the opportunity for a re-sit should it be required. The same cannot be said for those who delay."
The Institute of Financial Advisers (IFA) has welcomed the decision to extend the timeframe for registered financial advisers to gain their qualifications.
IFA president Lyn McMorran says its members have been feeling pressure to meet the timeframes between the Financial Service Providers Pre-Implementation Bill being passed and the Code coming into effect in December.
She says there is a definite need for some transitional arrangements to ensure financial advisers can enrol and complete their qualifications in time for the Code to come into effect."
Some of the unit standards proposed by the Code Committee as the minimum standard for authorised financial advisers are to be assessed via examination or completion of The National Certificate in Financial Services (Level 5) while others will need to be reviewed by an assessor, for example workplace evidence of good advice practice.
McMorran says the extension is not an invitation for advisers to delay seeking assessment and obtaining the qualifications required to become a qualified financial adviser.
IFA is still concerned about the large influx of registrations the regulators are expected to receive prior to the financial adviser registration cut off date of 1 December.
Power reiterated that financial advisers will still need to be registered as a financial adviser by 1 December in order to continue practising, but the IFA is concerned that the agencies involved in registering and authorising advisers could be overwhelmed.
"The regulators say that while they have a good grip on the numbers of financial advisers in New Zealand, there are still a large number of financial advisers who do not belong to a professional body or who have not yet identified themselves as being affected by this regime so it's still difficult to tell what the volume of applications for registration is likely to be," McMorran says.
"Therefore the numbers seeking registration before 1 December could far outweigh the numbers anticipated causing backlogs and delays in registrations, leaving many advisers unregistered by the time the regime comes into force."
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