On 1 July all of the remaining provisions of the Financial Advisers Act 2008 (FAA) came into force. These included:
- the restrictions on who is permitted to provide financial adviser services (sections 17 to 20 of the FAA);
- the prohibition on holding out as a financial planner or investment planner (section 20B of the FAA); and
- the disclosure obligations for financial advisers and brokers under the FAA, which replaced the obligations set out in the Securities Markets Act 1988 for investment advisers and brokers.
Now, financial advisers who advise on category 1 investment products or offer investment management and planning services:
- must meet minimum qualifications and professional standards; and
- be licensed by the FMA as Authorised Financial Advisers; or
- be an employee or nominated representative of a Qualified Financial Entity (QFE) providing an investment planning service or giving advice on category 1 products that are provided or promoted by the QFE or QFE group.
Financial advisers must also use a standard disclosure document that shows whether they are being paid fees, commissions or other financial and non-financial benefits.
Financial advisers and the services they can offer can be checked on a public register available at www.fspr.govt.nz.
Note that under the Canterbury Earthquake Response and Recovery Act 2011, Canterbury-based advisers have an extended deadline until 1 October 2011 to finalise their authorisation and meet their other obligations under the FAA.