300 FAP applications – FMA 'not worried'

The Financial Markets Authority says it’s comfortable with the rate of applications being lodged for transitional licences.

Thursday, March 5th 2020, 5:00AM 2 Comments

Licensing opened in November but, as of this week, only 304 licence applications had been approved.

Spokesman Campbell Gibson said that was a number the FMA was comfortable with and it did not have a target.

“We are continuing to encourage advisers to start the process now, rather than wait until close to the end of the licensing window, although we’re aware many advisers will have taken a summer break. The FMA is focused on helping advisers with their questions, along with MBIE, Companies Office and the Code Working Group.”

Some advisers have reported problems with the licensing application website but the FMA said there were no issues with it. They said that some advisers were being caught out by the need to register with the Companies Office first, and then with the FMA.

Financial Advice New Zealand chief executive Katrina Shanks said there were more issues with the Companies Office part of the application process than the FMA site.

Applicants have to register their company, and click through several screens to do so, to get the FSPR number required for the FMA part of the process.

She said it might make sense for the Companies Office to have a button on the front of its site for the next few months to make the process easier.

In some cases, it is understood that applicants who left out FSPR information were then given warning that they were going to be deregistered, when all they needed to do was add or amend information.

A survey by her organisation showed that 59% of AFA respondents said they would take out a FAP licence for their business. Another 24% said they would be part of another firm's FAP and 10% were planning to join a dealer group FAP.

But 17% of RFAs said they had not decided. Almost half would join a large licensed FAP, 23% would licence their own businesses and 6% would work under an employer licence - 9% of RFA respondents said they were not planning to be advisers under the new regime. 

Have you had problems with your application? Email editor@goodreturns.co.nz

The FMA is not allowed to extend its deadline for licensing.

Those who want to be engaged by another FAP still need to update their information on the FSPR and be confident that the FAP will be willing to engage them as of June 29.


Tags: FAP FMA licensing

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Comments from our readers

On 5 March 2020 at 8:03 am Adviser1 said:
I think it's probably less about taking a summer break and more about not having all the information we need to make an informed decision. When are the disclosure regulations/requirements out? This could affect how we structure our business which has an flow on effect to the licencing path we choose.
On 5 March 2020 at 8:50 am Doggy said:
Anecdotal stories would suggest there are a lot of FAP licence applications loitering around in FMA cyberspace.

The real question is how they will cope with a real volume of licence applications.

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