Number of advisers on FSPR decreases, and more daily news

It has been announced that the Companies Office has deregistered advisers that were registered as financial advisers on the FSPR. Although the number has decreased from the initial number recorded in March 2020, it has increased from the figured reported in March 2021. Currently are there 9236 registered financial advisers. Bolen Ng, MBIE national manager of business registries, has said that 458 FSPs were registered under s18(1)(b) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008. 550 letters were sent out to FSPs who weren’t linked to a FAP. Individuals had 20 working days to update their registration. FAPS now have until 15 March 2023 to apply for their full licences. Click here to read more

“As of July 29, there are 9236 financial service providers (FSPs) registered as financial advisers (FAs) on the Financial Service Providers Register (FSPR).

This number is down 80 from March 15, 2020, but up 58 from March 15, 2121.

FSPs on the FSPR:

- FSPs registered as financial advisers on the FSPR as at 15/03/20: 9316

- FSPs registered as financial advisers on the FSPR as at 15/03/21: 9178

- FSPs registered as financial advisers on the FSPR as at 29/07/21: 9236

Ministry of Business, Innovation & Employment national manager of business registries Bolen Ng says the Companies Office has deregistered 458 FSPs under s18(1)(b) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

"These are the FSPs that became financial advisers under the new financial advice regime on March 15, but hadn’t linked to a financial advice provider within three months of that date," Ng says.

In June, the Companies Office sent about 550 letters to FSPs who had not linked themselves to a financial service provider (FAP) warning them of imminent deregistration.

FSPs had a 20 working day objection period within which to update their registration.

FAPs now have less than two years to apply for a full licence by the cut off date of March 15, 2023.”

These reductions are not as great as feared by some through the implementation of the new regime. However, it may be too soon to declare that the necessary balance has been struck between raising standards and sustaining access to advice for the greatest number of clients. As the process of gaining a transitional licence did not require passing much of a threshold many advisers that may leave the industry may have entered the new regime with little or no intention of obtaining a full licence. Insurers report levels of new business production have fallen substantially. That suggests that the industry has sustained a serious blow not fully described by these numbers. 

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FSPR deregistration insights, and more daily news

As of 24 June there are 9,926 financial advisers registered on the FSPR. It is being reported that the number of advisers currently on the FSPR is likely to decrease. Since 15 June, 72 FSPs have been deregistered, with just 51% being voluntary. MBIE business registries national manager Rob Rendle has said that there hasn't been any deregistration because financial advisers failed to link with a FAP, although 550 linking failure notices were issued in June. Those that received the notice will have 20 days to update their registration. Rendle has noted that MBIE will only be able to update the registration figures after the 20 day period.

“Almost 10,000 financial service providers are now registered to provide financial advice in New Zealand according to the Companies Office, up by 748 from March 15 this year.

However, that number is expected to drop with about 550 financial service providers (FSPs) being sent letters from the Companies Office warning them of imminent deregistration.

Statistics (see below) provided to Good Returns by the Ministry of Business, Innovation & Employment state that as of June 24, 9926 FSPs were registered on the Financial Service Provider Register (FSPR), up from 9168 as of March 15.

Since June 15, 72 FSPs have been deregistered - 37 of those were voluntary deregistrations, 34 failed to provide annual confirmation and one was deregistered for failing to provide approved dispute resolution scheme details.

Ministry of Business, Innovation & Employment business registries national manager Rob Rendle says the Registrar has not deregistered any financial advisers for failure to link themselves to a financial advice provider (FAP) "...as he first has an obligation to give notice of intention to deregister".

"On 17 and 18 June we gave notice to those FPSs who had not engaged with a FAP by 15 June 2021. About 550 notices had been issued.

"Those FSPs have a 20 working day objection period within which to update their registration.

"Deregistration numbers won’t be known until the 20 working days has passed, and the Registrar has completed deregistration. FSPs will be sent a notice confirming deregistration once it’s completed," Rendle says.

FSPs on the FSPR:

- FSPs registered as financial advisers on the FSPR as at 15/03/20: 9316

- FSPs registered as financial advisers on the FSPR as at 15/03/21: 9178

- FSPs registered as financial advisers on the FSPR as at 24/06/21: 9926

Financial Adviser FSP removals since June 15, 2021:

- Failure to provide annual confirmation: 34

- Statutory Notification (failure to provide approved Dispute Resolution Scheme details): 1

- Voluntary deregistration: 37” click here to read more

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Legal and regulatory update for the life and health insurance sector

5 Apr 2021 – Following the 15 March 2021 transitional licensing close off date, InvestmentNews NZ issued a media report updating the numbers of transitionally licensed Financial Advice Providers (1,817), Authorised Bodies (1,200) , Financial Advisers (10,750) and Nominated Representatives (12,246). David Chaplin also tells us that search functionality for the FSPR is substantially more limited than the old register. https://investmentnews.co.nz/investment-news/fslaa-by-the-numbers-3000-entities-23000-individuals-1-register/

5 Apr 2021 – InvestmentNews NZ reported on Retirement Commissioner (RC), Jane Wrightson’s, presentation to a parliamentary committee last month, in which the Commissioner stated that the CFFC would unveil a new approach on April 16, targeting financial resilience, better stakeholder co-operation and access to ‘independent’ guidance. https://investmentnews.co.nz/investment-news/covid-prompts-retirement-commission-to-sort-strategy/


Quotemonster and Advicemonster updates - live now

We have updated the quotemonster site, on Thursday, and made the following items live, for more detail see below:

  1. New SOA report content setting options allow you to create more customisations for your SOAs if you are an Advicemonster subscriber. To access these click settings, then SOA Setting, then Report Content Setting
  1. New SOA template for Need analysis recommendation note pad - bring through all your calculations from the recommendation notepad in Advicemonster to quote and to the SOA.
  1. New nib rates applied to the site
  1. FSP input validation for user setting and register form - so it is important that your FSP number matches your name and the entry on the FSPR. A reminder that sharing your login is a breach of our terms and conditions and unusual account activity (like switching user names) will be picked up and we will be contacting account-holders that actively share their logins. 
  1. Improved the health product breakdown table in the research report.
  1. Applied Fidelity level standalone trauma maximum level term rule
  1. Changed Partners Life IP and MP max-age to 57 - as we do not quote reduced commission versions of income protection
  1. Update Web version number to v 3.8.7

Congratulations to Albert, Doreen, and the whole team on a big package of updates. Our special thanks to the advisers sending us issues and suggestions for improvement of the Advicemonster process and the SOAs. 


Legal and regulatory review for the life and health insurance sector

23 Feb 2021 – IRD released a special report on the new resurgence support payment legislation. https://taxpolicy.ird.govt.nz/news/2021/2021-02-23-special-report-resurgence-support-payment

24 Feb 2021 – Companies Office published the following notice on it FSPR website: https://fsp-register.companiesoffice.govt.nz/

FSPR online services will be unavailable from 5pm Tuesday 2 March 2021 to 8am Monday 15 March 2021 while we update the register to support the new financial advice regime that comes into effect on 15 March 2021.

During this period, you will be able to search the public register, but you won't be able to log in to your online services account to file, update, or access information regarding your financial service provider.

However, FSP’s wishing to give notice of their intention to apply for a transitional licence during this period can still do so. Shortly we will publish forms and information on how to apply during the outage.

23 Feb 2021 – Hone David Clark, Minister of Commerce and Consumer Affairs, diary released for January 2021, containing just 9 items, none identified as directly relevant to financial services. https://www.beehive.govt.nz/sites/default/files/2021-02/Min%20Clark%20Ministerial%20Diary%20January%202021.pdf

23 Feb 2021 – The Department of Internal Affairs advised that it is undertaking a review of sector specific guidelines for accountants, lawyers and conveyancers, and real estate agents, and is offering a survey for completion as a means to provide feedback on the guidelines. https://www.dia.govt.nz/AML-CFT-DNFBPs---Help-us-improve-our-guidance

15 Feb 2021 - The FMA released the Financial Markets Conduct (NZX Derivatives Market Rules) Approval of Rule Change Notice 2021. The notice came into effect from 15 February 2021.


Insight into FSPR usage, and more daily news

MBIE has published a document covering adviser and FAP responsibilities under the new regime. The document first sets out the rules of engagement, stating that every adviser must be engaged or linked to a FAP. Advisers must ensure the FAP registers the engagement on the FSPR. But to link to FAPs, advisers must first provide the FAP with their name and FSP number.

 From 15 March, advisers must have these things before linking to a FAP:

  1. A RealMe® login
  2. An online services account with the FSPR
  3. Authority to update records on behalf of the financial advice provider

In order for advisers and FAPs to engage, FAPs must:

  1. Log in to your online services account using your RealMe ID and password, and locate your registration in the ‘FSP Registrations’ tab of your dashboard.
  2. On the ‘View FSP details’ screen, select the ‘Financial Services’ tab and click the ‘Maintain Financial Services’ button.
  3. Scroll down to the ‘Financial advice service’ where you’ll see the FAs, if any, that you’re linked to.
  4. Click the ‘Add Financial Adviser’ button and search for the FA you wish to engage, using their FSP number or name. Select the FA from the drop-down list, and indicate whether or not they will be covered by your dispute resolution scheme (DRS).
  5. Repeat step 4 above for each new financial adviser you add. Please note, multiple advisers are displayed alphabetically. (Cont.)
  6. When you’ve finished updating your registration, click on ‘Next Step: Declaration’. Review and confirm the declaration.
  7. Click on ‘Next Step: Review’. Review the information you have entered and tick the check box to confirm the information is true and accurate
  8. Click on the ‘Submit’ button at the bottom right of the screen.
  9. Viewing the FAPs financial services, you’ll see that the FAs now appear on the ‘Financial Services’ tab.

To support the new regime being implemented, the FSPR will also be updated. The Companies Office will release guidelines and videos to help users closer to the date.

This video shows the engagement process.

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Partners Life: Is data the key to understanding underinsurance?


Action plan for sole advisers

Advisers that are relying on the sole-adviser exemption and who wish to continue operating as a sole-adviser need to register their company on the FSPR as a financial advice provider. Registration includes an FMA levy of $460.00 plus GST. A relief from the levy is offered to those who:

  • Rely on a sole-adviser exemption in the current regime, and
  • Have registered a company on the FSPR between 25 November 2019 and 28 September 2020 and indicated the company’s intention to apply for a transitional financial advice provider licence or to be an authorised body under another financial advice provider’s licence.

Click here to find out more