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Here's how licensing will work

The Financial Markets Authority will start accepting transitional licence applications on November 4 from advisers wanting to be financial advice providers (FAP) under the new regime.

Thursday, July 25th 2019, 6:00AM

John Botica

From June next year, when the new rules take effect, anyone offering advice to retail clients will need a transitional licence.

The FMA has released a series of tools to help advisers decide how they will operate in the new regime, where they fit in, what their duties could be and what steps they need to take, as well as a guide to how the application process will work.

Applications will be made online and will be accepted up until June.

Once the new regime begins, advisers who have not made an application for a transitional licence will have to wait for a full licence to be approved before advising retail clients, or work under another FAP's licence.

It will cost $405 plus GST to apply for a transitional licence plus $38.75 for every authorised body giving advice under your FAP.

FMA director of market engagement John Botica said it should be a straightforward process for most adviser businesses, completed in a couple of hours online.

It would cover the types of services and products the business would deal with, and who would be doing the advising.

"No proof is required at this stage to do that."

The FMA would then take two or three days to assess the application, he said.

"There might be times when we need to go back to the adviser but I would have thought the majority of advisers wouldn't hear back from us until such a time that we can say they are successful."

He encouraged advisers to apply as early as possible to give them some certainty for their businesses, so they could "get on with it" and think about other things that needed to happen to prepare for the new regime.

Getting a transitional licence did not mean an adviser had to go to full licensing for their FAP, he said. It would still be possible to alter course and choose to work under another FAP.

He said the system was designed to connect through to other sources of information to make the process as efficient as possible.

It was not yet known how many advisers would apply, Botica said, but transitional licensing would help to reveal that.

He urged advisers not to opt out simply because there was one part of the regime that did not appeal.

"I really hope all advisers sit down and think about their businesses and their strategy moving forward."

BEFORE YOU APPLY FOR A TRANSITIONAL LICENCE

  • Do you have a RealMe login?
  • Are you correctly registered on the FSPR?
  • Do you know what services and products you will advise on?
  • Do you know how many financial advisers or nominated representatives you will engage?

 

WHAT THE FMA WILL ASK IN APPLICATION 

  • What’s your Financial Service Provider (FSP) number?
  • Will you engage authorised bodies?
  • What services and products will you provide regulated financial advice to retail clients on?
  • How will you provide regulated financial advice to retail clients?
  • Will you provide regulated financial advice to another business’s retail clients on their behalf?
  • Will another business (or its staff) with a financial advice provider licence provide regulated financial advice to retail clients on your behalf?

 

About authorised bodies:

  • What is the authorised body’s FSP number?
  • What services and products will the authorised body provide regulated financial advice to retail clients on?
  • How will the authorised body provide regulated financial advice to retail clients?
  • Will the authorised body (or its staff) provide regulated financial advice to retail clients on your behalf? Will another business (or its staff) provide regulated financial advice to the authorised body’s retail clients on its behalf?

 

For entities: 

  • We ask for details about criminal convictions relating to your senior managers or directors. 
  • Regulatory action relating to you or your authorised bodies. If you are an individual applicant, you won’t see this section as it only applies to incorporated companies

 

For individuals:

  • We ask for details about any criminal convictions relating to you as the applicant. If you are an incorporated company, you won’t see this section as it only applies to individual applicants.

Tags: Financial Services Legislation Amendment Bill FMA John Botica licensing

« FMA: Advice processes pose risk to consumersTransitional licence not a free ride »

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Last updated: 4 December 2019 9:11am

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