News from Australia that a personal budgeting services firm needed an AFS license prompted RiskinfoNZ to ask the FMA if similar organisations in New Zealand will also need a licence.
Staff working in budgeting services organisations typically provide help to those facing a financial quagmire, providing clients with guidance and advice – free of charge – to help them navigate their way out of debt and better manage their money.
A spokesperson for the FMA says those working (or volunteering) in budgeting advice roles are exempt from having a licence under schedule 5 of the Financial Markets Conduct Act for not-for-profits.
“It means that ordinary budget advice wouldn’t fall within the scope of the (regulatory) regime,” says an FMA spokesperson.
Schedule 5, clause 13 of the Act states that:
(1) Financial advice is not regulated financial advice if it is given—
(a) in the ordinary course of the business of a non-financial not-for-profit organisation; and
(b) for no charge.
(2) In this clause, non-financial not-for-profit organisation means an organisation—
(a) that operates other than for the purposes of profit or gain to an owner, a member, or a shareholder; and
(b) that is not the product provider (or related to the product provider) of a financial advice product.