The Minister of Commerce and Consumer Affairs, Kris Faafoi, has released a discussion paper seeking feedback on proposed financial advice provider licensing fees and changes to the FMA levy in the new financial advice regime.
The proposed costs for financial advice providers (FAPs) cover licensing fees and an FMA levy.
FMA Licensing Fees
Proposed transitional licensing fee:
- $363 – for all FAPs
Proposed full licensing fee:
- $575 – for a FAP that is a single adviser business or only gives advice on its own account
- $730 – for a FAP that engages multiple financial advisers but not nominated representatives
- $885 – for a FAP that engages nominated representatives
The proposed levy for FAPs or financial advisers at initial registration is $460, then $230 for FAPs at each annual confirmation, $179 for each nominated representative and $1,106 if the FAP gives advice on its own account.
Minister Faafoi said in the report that regulation inevitably imposes some compliance costs.
“It is crucial that compliance costs are fair and reasonable…”
“However, it is crucial that compliance costs are fair and reasonable so that financial advice providers can operate efficiently and consumers can continue to access financial advice,” he said.
“I have heard concerns about how the costs of the regime will affect smaller advice practices. Those practices are a hugely important part of the ecosystem and I want to ensure that compliance costs are appropriate for those practices,” Faafoi added.
The FMA estimated in its discussion paper that around 2,240 financial advice providers will apply for a licence.
It also estimated there would be around 8,000 financial advisers and 21,500 nominated representatives giving financial advice in the new regime.
Submissions are due by 22 February 2019.