1 Comment 1 Commentby Susan Edmunds
Advisers who do not have a transitional licence by next June will need to work under another FAP licence or wait until they received a full licence.
FMA director of market engagement John Botica said it should be a straightforward process. He said advisers could apply for a transitional licence to enable their business to continue operating, and then make a decision later on about whether they wanted to continue to a full licence.
But Katrina Shanks, chief executive of Financial Advice NZ, said advisers should be aware that a transitional licence still came with obligations.
Once the licence was granted, the advice business would immediately have to comply with nine duties (see below), she said.
Transitional licensing would also include a record-keeping and complaints process standard for all advice businesses.
She said, even though a transitional licence seemed easy to obtain, advisers would need to ensure their businesses had the compliance in place to meet the conditions of the licence. “They need to be compliant on day one of the licence being granted.”
But she said many advisers were still waiting to see what the rest of the industry would do and which groups and providers would opt for a full FAP licence.
Until that became clearer, it would be hard for advisers to definitively determine their path forward and transitional licensing was a way to allow for business to continue through that period. “Transitional licensing is a fantastic opportunity to ensure you can still give financial advice.”
THE DUTIES
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Not quite. According to the FMA guidance and timeline, all licences will come into affect on the 20th of June 2020. They may be granted between November 2019 and June 2020.