Catching the attention of readers this week was our report based on the FMA’s announcement that less than a third of transitional licence holders have applied for a full licence…
While the FMA says the new regulatory regime has been “transformational”, thousands of transitional licence holders have yet to apply for a full licence.
Speaking at the FSC’s Future Ready conference in Queenstown on Tuesday 14 June, the FMA’s Derek Grantham said ‘transformational’ is a word he hears “an awful lot” when visiting advisor businesses.
“They say the change is significant,” says the regulator’s Principal Consultant. “They can point to new tools, they can point to new ways of thinking, and they can point to new ways of ‘doing’.
“But not everybody is in that position – not everybody is feeling that way.”
Joining Grantham at the conference was John Botica (pictured), the FMA’s Director of Market Engagement and acting Director of Regulation.
He said of the 1,800 transitional licence holders listed on the FSPR, just 30% had completed their application for a full FAP licence or are in the process of applying for it.
He said a further 20% have indicated their intention to apply on the FSPR’s website, but are yet to apply for a full FAP licence, and half of all current transitional licence holders – 900 financial advice providers – have not started the process at all.
There are around 9,000 advisers registered on the FSPR, meaning potentially thousands are linked to FAPs that have not yet applied for a full licence.
“…I truly want all financial advisers to be successful…”
“We do not know where they are in their journey around applying for a full licence,” he said. “What can we do to help?”
While saying financial advisers are the most important player in financial services, he confirmed there would be no roll back of the new regulations.
“So 15 March 2023 is hard coded,” he said. “If you don’t have a full licence by then, you can no longer provide advice.
“What I will say is that I truly believe in financial advice and I truly want all financial advisers to be successful, because financial advisers change people’s lives.
“To those advisers who are sitting on the fence, and are not sure what to do next, you need to make informed and proper decisions about the future.”
Botica said the FMA hasn’t set the hurdle for licencing so high as to knock advisers out of the market “…it is balanced and enables people to make really good decisions”.
“Applying for a full licence isn’t a walk in the park,” he said. “But having a properly run business has benefits for everybody.”
The FMA is phoning advisers to ask if they need help, and Botica recommends those with questions about navigating the application process contact the regulator or speak with those who already completed the process.