The Financial Markets Authority (FMA) is consulting on two standard conditions for transitional financial advice provider (FAP) licences – maintaining adequate written records and having internal client complaint resolution processes.
Submissions close on Friday, 26 July 2019.
The Financial Services Legislation Amendment Act 2019 (FSLAA) creates a new licencing regime for financial advisers which will come into force in June 2020. There will be two phases to the licensing process – the initial transitional licence, and full licencing by June 2022.
The FMA expects to be in a position to accept transitional licence applications from the fourth quarter of this year.
The consultation paper outlines how the new regime will work and seeks feedback on two standard conditions to apply in relation to financial advice services to retail clients. All FAPs would need to comply with the standard conditions.
1 To maintain adequate written records.
A FAP must maintain adequate written records in relation to its financial advice service. The records must demonstrate how it, and any persons engaged by it to give regulated financial advice to retail clients, have complied with the Financial Markets Conducts Act, the Financial Markets Conduct Regulations and the Code of Professional Conduct for Financial Advice Services. A FAP must ensure the records are kept for at least seven years and provide them to the FMA on request as soon as practicable.
2 To have an internal process for resolving client complaints.
A FAP must have an internal process for resolving client complaints in relation to its financial advice service that provides for:
- complaints to be acknowledged as soon as practicable
- retail clients to be given information about the process and how it works
- complaints to be resolved and a response provided to the client as soon as practicable
- a written record to be kept of all complaints and the action taken to resolve them.
Further detail on how the conditions would be met are included in the consultation paper.
If you would like assistance in making a submission, or advice on what the new regime could mean for you, please get in touch with our contacts.
Financial Services Legislation Amendment Act – Introduced 8 April 2019
MBIE Guidance on the regulation of financial advice