Adviser licensing.

From 17-March 2023, anyone who provides financial advice to retail clients must either hold, or operate, under a Financial Advice Provider (FAP) full license.

If a full license is not granted in time, you and your representatives will need to temporarily stop providing advice immediately.

The FMA has recommended:

• you have a contingency plan in place. This may include having another licensed financial advice provider provide support to your clients.
• will be actively monitoring the license status of all financial advice providers.
• may take enforcement action in relation to any non-compliance.

Until a full license is granted, Fidelity Life is required to:

• put your agency on hold.
• stop all commissions.
• remove you access to customer information.
• not accept any new business applications.

Full FAP licenses must be granted by 30 April 2023 – if not it will result in the termination of your Fidelity Life distribution arrangements.

If Fidelity Life becomes aware of or suspects anyone not in the financial advice regime of providing advice to retail customers, Fidelity Life will be obliged to notify the FMA.

From 17-March 2023, anyone who provides financial advice services to retail clients must either hold, or operate under, a full Financial Advice Provider (FAP) license.

If you did not apply for a full FAP license and have not joined another fully licensed FAP, you must not provide any financial advice services to retail customers.

Fidelity Life will:

• terminate your distribution arrangements.
• ensure our mutual customers have access to financial advice through whatever means necessary. This may include transferring your book of business to a FAP that is fully licensed.
• be obliged to notify the FMA of anyone not in the financial advice regime but providing advice to retail customers.

From 17-March 2023, anyone who provides financial advice to retail clients must either hold or operate under, a Financial Advice Provider (FAP) full license.

If you’ve not made arrangements to obtain or operate under a full FAP license, or have not advised Fidelity Life of your intentions, your distribution arrangements with Fidelity Life have been terminated

Fidelity Life will:

• ensure our mutual customers have access to financial advice through whatever means necessary, and this may include transferring your book of business to a FAP that is fully licensed.
• be obliged to notify the FMA of anyone not in the financial advice regime but providing advice to retail customers.

From 17 March 2023, anyone who provides financial advice to retail clients must either hold or operate under a full Financial Advice Provider (FAP) license.

• All transitional licences expired on 16 March 2023 and there is no grace period this time.
• Fidelity Life has no authority to grant anyone an exemption to this regulatory obligation.

If your full FAP licence application was not processed in time for the start of the new regime, you and your representatives will need to temporarily stop providing advice.

The FMA:

• has recommended you have a contingency plan in place. This may include having another licensed financial advice provider provide support to your clients.
• will be actively monitoring the license status of all financial advice providers.
  

From 17-March anyone not licensed or operating under a full FAP license can provide a non-advice service to customers.

• How and what non-advice services are provided to customers and who can provide those services will be determined by each FAP.
• FAPs must ensure it and its representatives don’t provide any financial advice services whilst the FAP is unlicensed.
• If you are unsure, you should get direction from your licenced FAP or the FMA on this.  

The FMA will continue to accept applications for full licenses at any time.

• If you were a transitional license holder up to 17-March 2023 and you have not yet applied for a full FAP license by this date, you must not provide any financial advice services to retail customers until you have received a full licence.

If you haven’t already done so, you need to advise us of your new arrangements. Your Fidelity Life Business Manager can provide you with the guidance you need for your particular situation.

If you haven’t already done so, you’ll need to advise us of your new arrangements. Your Fidelity Life Business Manager can provide you with the guidance you need for your particular situation.

Anyone who provides a financial advice service without either holding, or operating under, a full license, will be in breach of the FMC Act and subject to enforcement action. 

Useful links: 

• FMC Act – Part 8 Enforcement, liability and appeals.
• Enforcement in the new financial advice regime.
• Liability in the new financial advice regime.

All financial advisers are required to hold the New Zealand Certificate of Financial Services (NZCFS) – Level 5 qualification (or certified equivalency).

Demonstrating competency is not directly linked to the granting of a full FAP licence. However, both the FAP and its representatives are responsible for ensuring financial advisers do not provide financial advice services after 16 March 2023 until the required competency is obtained.

Fidelity Life will:

• seek confirmation from all FAPs by end of March 2023 that their representatives are qualified with NZCFS Level 5 (or equivalent); and
• either suspend or terminate the distribution arrangements with Fidelity Life for anyone without the required competency.

Competency and qualification requirements for nominated representatives are determined by the conditions of the FAP licence granted by the FMA. Your Fidelity Life Business Manager can provide you with guidance on the specific requirements for you and your FAP.

Fidelity Life will be seeking confirmation from all FAPs by end of March 2023 that their representatives are qualified with NZCFS Level 5 (or equivalent).

At that time, the distribution arrangements with Fidelity Life for anyone without the required competency will either be suspended or terminated.

• Suspension – NZCFS Level 5 (or equivalent) must be attained, and evidence provided to your Fidelity Life Business Manager no later than 30 April 2023 to lift the suspension.
• If not achieved by 30 April 2023, distribution arrangements with individual financial advisers will be terminated.
• Termination –As of 17-March, Fidelity life will require evidence of assignment submission to avoid termination. Evidence can be sent to your Fidelity Life Business Manager.

Fidelity Life is unable to pay initial or ongoing commissions to a party that does not hold a current distribution agreement with Fidelity Life, or while a distribution agreement is suspended.

• Where the distribution agreement has been suspended (i.e. pending a) the grant of a full FAP licence; or b) an update to the FSPR reflecting associations between a FAP and AB or FA) any accrued commission will be released to the intermediary when the FSPR is updated and reflects the new arrangements.
• Where the distribution agreement has been terminated and the customer book is in the process of being sold, any accrued renewal commissions will be released to the seller upon completion of the sale.
• No interest will be accrued for held commissions.

As of 17-March Fidelity Life will not pay commission to a financial adviser or FAP who does not hold, or operate under, a full Financial Advice Provider (FAP) license. 

Any pending new business will:

• be reassigned to an adviser/FAP who has a current distribution arrangement with Fidelity Life.
• Any commission for new business in the pipeline will need to be paid to the originating adviser by the new adviser/FAP.

You will need to:

a) Ensure your affected customers are aware of the situation and get their consent to connect them with a new intermediary.
b) provide the new adviser/FAP with the customers’ records so they can appropriately service the customer(s).
c) advise Fidelity Life who the new adviser/FAP will be so that we can update our records.
d) Negotiate and agree any remuneration arrangements with the new adviser/FAP who has been assigned your new business cases.

Accrued commission will be released to the seller upon completion of the sale/transfer of their book.

• If the sale of the book does not complete within 6 months, Fidelity Life will retain any accrued commission (per clause 9.5 of the Fidelity Life Distribution agreement dated 31 July 2021).
• No interest will be accrued for held commissions.

From 17-March all accrued commissions for terminated or suspended intermediaries will be held in suspense by Fidelity Life:

Suspended intermediaries:

• Any accrued commission will be released for payment once the intermediary is confirmed to be fully licenced or operating under a full licence.
• No interest will be accrued for held commissions.

Terminated intermediaries:

• If an intermediary completes the sale/transfer of their customer book within 6 months of their Distribution agreement ending, any accrued commission will be released to the seller/vendor.
• If the sale/ transfer takes longer than 6 months after the Distribution agreement ended, any accrued commission will be retained by Fidelity Life (per clause 9.5 of the Fidelity Life Distribution agreement dated 31 July 2021).
• No interest will be accrued for held commissions.

Intermediaries have 6 months from the date that Fidelity Life notifies them that their distribution arrangements have ended (per clause 9.5 of the Fidelity Life Distribution agreement dated 31 July 2021).

Fidelity Life may, at its sole discretion, transfer the customer book to another intermediary that holds a current Fidelity Life Distribution Agreement (per clause 9.7 of the Fidelity Life Distribution agreement dated 31 July 2021).

Commissions payments will be suspended and accrue (for no more than 6 months) until a sale of the customer book is completed.

• Accrued commission will be released to the seller upon completion of the sale. If sale of the book does not complete within 6 months, Fidelity Life will retain any accrued commission (per clause 9.5. of the Fidelity Life Distribution Agreement dated 31 July 2021).
• No interest will be accrued for held commissions.

Yes. Your Fidelity Life Business Manager can work with you to identify potential purchasers of your customer book

If you are the appointed servicing adviser/intermediary, you will have access to customer information and may sell the ‘servicing rights” for the customer to a new intermediary.

This means:

• the new intermediary will have access customer information
• will have a servicing relationship with the customer.
• doesn’t automatically include the right to receive ongoing commission associated with the policy.
• The ‘originating adviser’ will continue to receive ongoing commissions until such time as they sell or transfer those rights to another intermediary.

We advise you to contact your Fidelity Life Business Manager for more information.

Fidelity Life will put customers of suspended or terminated intermediaries in touch with a qualified and licenced financial adviser in their area to provide financial advice.

Intermediaries should have arrangements in place to refer their customer(s) to a FAP or financial adviser that is licensed or is operating under a full FAP license.

Yes. The FMA has recommended intermediaries have a contingency plan in place.

This may include:

• having another licensed financial advice provider provide support to their clients (particularly for sole practitioner advisers).
• ensure that intermediary that they appoint to service Fidelity Life policy holders has a current Distribution agreement with Fidelity Life.
• let Fidelity Life know who they have appointed to provide financial advice services to customers while their own arrangements with Fidelity Life are suspended.

Suspended or terminated intermediaries may continue to support vulnerable customers in a non-advice capacity.

It is the responsibility of the intermediary to ensure they:

• do not provide a financial advice service to customers.
• provide Fidelity Life with written confirmation from the customer that: 

a) appoints the suspended/terminated adviser as a third-party authority; and
b) allows the suspended/ terminated intermediary access to customer information held by Fidelity Life.

Fidelity Life will continue to assess and process new business applications as normal.

• Any pending new business will be reassigned to an intermediary who has a current distribution arrangement with Fidelity Life.
• The customer will be referred to another licensed and qualified financial adviser to provide any advice the customer might need about their application.

If you have appointed a locum adviser to support your customers whilst you are unable to provide financial advice, you will need to:

a) discuss the situation with your affected customers and get their consent to connect them with the new locum adviser/FAP.
b) provide the new adviser/FAP with the customers’ records so they can appropriately service the customer(s) in your absence. 
c) advise Fidelity Life who the locum adviser/FAP will be so that we can update our records. If you don’t let us know who the locum adviser/FAP will be, Fidelity Life may appoint another intermediary at its discretion to support the customer.

Fidelity Life will continue to assess, and process claims as normal.

Suspended or terminated intermediaries may continue to support vulnerable customers in a non-advice capacity. It is the responsibility of the intermediary to ensure they:

• do not provide a financial advice service to customers.
• provide Fidelity Life with written confirmation from the customer that:

a) appoints the suspended/terminated adviser as a third-party authority; and
b) allows the suspended/ terminated intermediary access to customer information held by Fidelity Life.

If a customer needs financial advice in relation to their claim they will be referred to another licensed and qualified financial adviser.

If you have appointed a locum adviser to support your customers whilst you are unable to provide financial advice, you will need to:

a) discuss the situation with your affected customers and get their consent to connect them with the new locum adviser/FAP.
b) provide the locum adviser/FAP with the customers’ records so they can appropriately service the customer(s) in your absence.
c) advise Fidelity Life who the locum adviser/FAP will be so that we can update our records. If you don’t let us know who the new adviser/FAP will be, Fidelity Life may appoint another intermediary at its discretion to support the customer.

• MBIE – what is happening now
• MBIE - expected timeframes
• MBIE - Engaging individuals through ‘interposed persons’ to give financial advice
• MBIE - Can financial advisers be engaged by multiple financial advice providers? 

• FMA - New regime - Explore your options

• FMA - New regime - Getting prepared
• FMA - Financial Advice Providers (FAPs) in the new regime

• Financial Services Legislation Amendment Act 2019
• Financial Markets Conduct Act 2013
• FMA - Code of Professional Conduct for Financial Advice Services
• Financial adviser disclosure regulations 2021

Anyone providing regulated financial advice to retail clients under the new regime will need to fulfil certain duties and obligations from 15 March 2021, even if you’re providing advice on behalf of someone else.

The FMA’s discussion of them can be summarised as:

• Comply with the code’s competency requirements and ethical behaviour conduct and client care standards
• Ensure your client understands the nature and scope of your advice
• If there’s a conflict of interest give priority to your client’s interests
• Exercise care, diligence and skill
• Disclose prescribed information
• Only recommend products that comply with the FMC Act
• Tell the FMA if you materially contravene your obligations or make significant changes to your business

Additionally, if you’re a licensed FAP, you must also:

• Ensure all financial advisers providing advice on your behalf comply with the duties above
• Have appropriate processes and controls in place if you engage nominated representatives, to allow you to control the advice being given and the circumstances in which it is given
• Comply with any license conditions

MBIE resources:

Enforcement in the new regime

Liability in the new regime

For more explanation about why these duties matter, read the FMA’s factsheets:

• Meeting your obligations under the new financial advice regime
• Your obligations as a licensed financial advice provider

• FSC website
• Code of conduct video
• Disclosure video
• Licensing video
• Fees and levies video
• FSLAA video

• FMA and RBNZ report on life insurer conduct and culture
• FMA - A guide to the FMA's view of conduct

FAP costs

Fees and levies