Eighty-six per cent of financial advice providers have started, or have completed, the full licence application process.
According to the FMA, 66% of financial advice providers are operating under, or have applied to the regulator, for a full licence. A further 20% have taken the first step to register on the FSPR for the “financial advice provider-licensee-full licence” service, but have not yet formally applied for a licence. It means 14% of advisers have not began the process to full licence.
The FMA had set 30 September 2022 as the target date for all transitional financial advice providers to apply for their Class 1 or Class 2 full licences. This was to help ensure all applications could be processed 16 March 2023 – when transitional licences expire.
John Botica, FMA Director of Regulation and Operations, says the full licensing process is significantly more rigorous than transitional licensing.
“We have kept an open mind about what proportion of advice providers would go on to complete the full licensing journey,” says Botica.
He says the advice sector is undergoing change with some providers choosing to become authorised bodies under another provider, and smaller firms merging.
“However, at this stage we are not seeing any significant restructuring of the advice market – the smaller adviser firms remain prevalent,” he says.
As at 30 September the total number of licensed financial advice providers (both transitional and full) stands at 1,750 – a reduction from the 1,800 at the start of the new regime in March 2021.
Botica expects there will be some applications right up to the wire, “…which we have actively warned against”.
“Advice providers yet to submit their applications are encouraged to do so as soon as possible to avoid the risk of not having a licence to operate by the March 2023 deadline,” says Botica.
14% of advisers with a transitional licence have yet to apply for a full licence. Is this:
- As expected (90%)
- A surprise (10%)
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