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Licence applications still slow to roll in

The next couple of months may bring a rush of transitional licence applications, it has been predicted.

Monday, January 13th 2020, 5:00AM 1 Comment

Fred Dodds

Licensing began at the end of November but as of last Friday only 54 had been issued.

All advisers will need a transitional licence, or to work under another entity with a licence, if they want to continue to advise after next June.

Former IFA chief executive Fred Dodds said 54 was not many, if it was correct that about 2,000 licences would be needed.

He said some of the delay could be blamed on the time of the year. Some life insurance advisers might be waiting to see what groups were going to offer before deciding whether to take their own licence.

Dodds said there should still be sufficient time to process the remaining applications.

Financial Advice NZ chief executive Katrina Shanks agreed it was probably a timing issue.

With licensing opening near Christmas, advisers had been busy with work and then on holiday.

“Currently many advisers are on leave and unplugged from work so you would not expect them to be online registering a FAP. There is also a number of unknowns in the marketplace for some advisers who are seeking to belong to a group or aggregator's FAP and are in a holding pattern until they have more information to make an informed decision.”

She said advisers who were not sure if they wanted their own licence could still apply for a transitional licence for themselves, and then move to another entity's licence when it came time to apply for a full licence.

Adviser Regan Thomas said there were some indications that some advisers had not been as engaged with the process so far as they should have been and there were concerns that not all would take the necessary steps in time for the end of the transitional period.

Tags: Financial Advice New Zealand FMA Fred Dodds FSLAA Katrina Shanks licensing

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Comments from our readers

On 29 January 2020 at 5:33 pm Murray Weatherston said:
Transitional FAP Licence Application
Today I have seen a FMA transitional application form for the first time, and was amazed as to how little information was requested.

Items covered were:

Before you begin
Will you engage any authorised bodies?

Applicant details
1. What regulated financial advice will you provide to retail clients?
2. Which financial advice products [types, not individual manufacturers] will you provide regulated financial advice to clients you will provide advice on?
3. How will you provide regulated financial advice to retail clients - show numbers of Financial Advisers and Nominated Representatives respectively, and whether you will have a digital advice facility
4. Will you provide regulated financial advice to another business's retail clients?
Will another business with a FAP licence (or its staff) provide regulated financial advice to retails clients on your behalf?

Fit and Proper
A number of declarations about directors and senior managers about past behaviours (most of which will get a No response I would think from most applicants.]

That's all that's asked as far as I can see.

Looks to me like a "breath on the mirror test"!

Designed for a computer to mark the applications. No triggers and licence approved. Giving an unexpected or wrong response to a question will trigger further enquiry from a real person..

All this reinforces to me my previous thoughts that FMA is trying to do nothing to frighten the horses as they try to muster them all into a corrall that will be opened to let said horses onto the course proper come June 29 when the new regime starts.

At this stage, I expect FMA will only then start to poke a stick into any of the transitional licensees and their businesses to see whether the original approval was actually justified.

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Last updated: 21 September 2020 10:48am

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