New mutual recognition arrangements for Australian and New Zealand financial advisers came into effect on 6 July. The arrangements enable financial advisers to provide services in each other's countries based on the qualifications and experience they have attained from their home country.
New Zealand arrangements
The Financial Advisers (Australian Qualified Advisers) Exemption Notice 2012 sets out FMA's exemption for Australian advisers to operate in New Zealand. The notice allows Australian qualified advisers 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 view FMA's fact sheet on the new exemption click here.
Prior to the grant of this exemption, the only avenue for recognition of Australian-qualified advisers when they applied to be licensed advisers in New Zealand (i.e., AFAs) was under the Trans-Tasman Mutual Recognition Act 1997. This is very limited in its application for financial advisers as it applies only to individuals who are Australian licence holders when they apply to be authorised/registered under the New Zealand financial adviser regime.
Australian arrangements
To enable New Zealand AFAs to operate in Australia, the Australian Securities & Investments Commission (ASIC) has provided relief from Australian training requirements by amending its regulatory guides (RG 146 Licensing: Training of financial product advisers and RG 206 Credit licensing: competence and training) which set out the minimum training requirements for individual financial advisers in Australia.
The amended regulatory guides treat:
- current and former AFAs; and
- current and former advisers of qualifying financial entities (QFEs) who meet the competency requirements to be an AFA set out in Code Standard 16 of New Zealand's Code of Professional Conduct for Authorised Financial Advisers,
who have practised for at least six consecutive months, as fully meeting the training standards currently required by the respective guides for the relevant products or subject areas covered in their New Zealand qualifications (apart from superannuation and margin lending due to the lack of corresponding training requirements in New Zealand for these products). [A 'former adviser' is an adviser not currently practising but who has done so within the three years before the adviser started practising in Australia.]
