Guidance note

Guidance Note: Financial Advice Provider Transitional Licensing

This document is designed to provide an overview of transitional licensing as it relates to the new financial advice provider (FAP) regime. As per guidance from the Financial Markets Authority (FMA), there are two phases in the licensing process for the new FAP regime; transitional licensing and full licensing.

The main purposes of this two-stage transition are:

  • To help existing industry participants progressively move towards operation under the new regime, making the transition smoother and more manageable, particularly in relation to competency requirements;
  • To provide the FMA and education providers with a better sense of who is operating in the market, enabling them to better anticipate the number of full licences and resources needed for compliance and training; and
  • To avoid the complexity for industry, consumers and the FMA of having two regimes concurrently in place.

For advisers, the key benefit of the transitional licensing phase is that it enables current financial advisers to continue providing financial advice during the transition period, while giving time to take the necessary steps to meet any competence, knowledge and skills standards that are prescribed by the new regime, and in the new Code of Conduct.

In a pragmatic sense, the transition process will vary, depending on whether you intend to become a FAP, or join a FAP. This guidance note will explore how transitional licensing fits into the shift towards the new regime, the time frames involved, important matters to consider prior to applying for a transitional licence, and the application process.

Download the full guidance note below: