While the Trans-Tasman Mutual Recognition legislation already applies to Australian financial services licence holders, most of these licence holders are firms or companies. To enable individual financial advisers with relevant qualifications to operate on either side of the Tasman, both regulators recognised a need for a different mechanism based on the spirit of that legislation.
FMA has granted an exemption for Australian qualified advisers allowing them to apply to be authorised financial advisers (AFAs) in New Zealand based on their existing Australian qualifications.
Australian advisers who hold the specified qualifications will be exempt from the educational qualifications requirements for AFAs set out in the Code of Professional Conduct for AFAs, and will be able to hold a licence relevant to their practice area and qualifications in Australia. The exemption is also subject to a number of other restrictions and conditions, such as compliance with the New Zealand Code of Professional Conduct for AFAs.
To enable New Zealand AFAs to operate in Australia, ASIC has amended its regulatory guides which set out the minimum training requirements for individual financial advisers in Australia. Recognition has been given to New Zealand AFAs and Qualifying Financial Entity (QFE) advisers to enable them to practise in Australia in certain areas.
The Trans-Tasman mutual recognition of financial advisers will take effect from 6 July 2012.
Strategi believes this is a great advancement for advisers on both sides of the Tasman but caution needs to be applied by advisers. This mutual recognition only applies to AFAs and QFE advisers and they can only operate in their area of proven expertise. For New Zealand advisers, it will enable them to continue servicing those clients who have moved to Australia and it will avoid costly training and licensing in Australia. However, any adviser planning to use this mutual recognition should read the fine print. A QFE or ex-QFE adviser is not automatically accepted. They need to meet the competency standards required of an AFA under Code Standard 16 to be accepted. New Zealand advisers will not be able to provide advice on Australian Superannuation or margin lending unless they undertake appropriate courses on the subject in Australia. Greenslade does not think this will pose much of a problem for New Zealand advisers as most of them are providing advice relating to assets and insurances their clients have in New Zealand and not new investments they are making in Australia.
