Update to reference standards for Financial Advice Providers

Following the release today by the FMA of the final Classes and standard licence conditions for Financial Advice Providers, we have updated our pack of 'reference standards' for a licensed FAP. This document brings together in a single handy reference a summary of the different laws, regulations, and guidance, applicable to operating a Financial Advice Provider. Clients using us for governance, risk, and compliance work will receive a copy of the updated reference standards guide. Contact us if you would like to receive one. 

The main change at this point is the replacement of the consultation material on classes and standard conditions for a FAP licence with material extracted from the two new FMA documents covering:

  • Classes of licence
  • Final standard conditions for a FAP licence

The reference standards document is still incomplete and will remain incomplete until the FMA releases two outstanding documents as follows:

  • FMA License Guide for Financial Advice Providers (expected this month)
  • Annual Regulatory Reporting Requirements (still to be consulted upon next year)

Legal and regulatory update for the life and health insurance sector

4 Nov 2020 – FMA announced the appointment of two new specialist roles focused on deepening the regulator’s expertise in two evolving and important sectors: financial technology (FinTech) and environmental, social and corporate governance (ESG) impacts on financial markets. https://www.fma.govt.nz/news-and-resources/media-releases/fma-appoints-specialist-roles-in-fintech-and-integrated-financial-system/

5 Nov 2020 – In the latest e-mailed FMA Update, the FMA advised that:

  • The Financial Advice Provider Full Licence Application Guide will be released on the FMA website this month, with Financial Advice New Zealand hosting a launch event, which will be livestreamed nationwide from Christchurch.
  • The FMA intends to seek submissions from the public this month on a draft guidance note on advertising offers of financial products, with submissions expected to close mid-February 2021.

5 Nov 2020 – Commerce Commission released its Complaints Snapshot for 2019-2020, with an associated media release noting the increase in travel related complaints, with telecommunications complaints still featuring strongly. https://comcom.govt.nz/business/consumer-reports/complaints-snapshot-201920


Which advisers will win the future?

Which advisers will win the future is my latest piece at goodreturns - see this link. This also reminded me to mention the value of a special kind of insurance advisers can buy against the risk that their preferred employer might not hire them on the terms that they like, and they need to practice as an independent financial adviser on March 16 next year - so do check that one out too. 


Legal and regulatory update for the life and health insurance sector

27 Oct 2020 – Takeovers Panel extended COVID-19 class exemptions for capital raising from 31 Oct to 31 Dec 2020. https://www.takeovers.govt.nz/about-the-panel/news/covid-19-class-exemptions-for-capital-raising-extended/

27 Oct 2020 – Privacy Commissioner posted information on the website that, from 1 December, businesses and organisations that send personal information overseas will need to comply with new privacy Principle 12 in the Privacy Act 2020, which adds new controls on the disclosure of personal information to overseas organisations and businesses. https://www.privacy.org.nz/news-and-publications/statements-media-releases/new-principle-for-disclosing-personal-information-overseas/


FSC Generations: Professional Advice - Get In Shape: The Next Bite of the Apple, supported by Chatswood Consulting

Chatswood Consulting is pleased to support the FSC's Generations conference and the professional advice session in particular. In a time of great transition, why not meet with the decision makers of the regulatory change?

This year’s panelists

  • Sharon Corbett, Manager Financial Markets, MBIE

Sharon manages the financial markets policy team at MBIE. She has been leading the Ministry's team amending New Zealand's financial advice legislation since the review commenced in 2014

  • John Botica, Director of Market Engagement, FMA

John Botica is the Director of Market Engagement at Financial Markets Authority. John is an experienced senior executive, director and consultant in the financial services industry. He was co-founder of the Assure NZ Group, Managing Director at Guardian Trust and General Manager Wealth Management at AXA

  • Angus Dale-Jones, Chair, Code Working Group

Angus is the Chair of the Code Working Group and is a chartered accountant and former financial services regulator in Australia and NZ. Angus runs a conduct, compliance and regulatory strategy consultancy

  • Derek Grantham, Principal Consultant, FMA

Derek works directly with the Director of Market Engagement, and has successfully represented the FMA at numerous industry events, often as a speaker or panelist. This has helped build effective relationships between the regulator and market participants and presented the FMA as a modern and approachable regulator. He is passionate about engaging with the financial sector to ensure that New Zealand financial markets remain transparent and fair.

Why you would attend

In this time of change, some may feel overwhelmed, some may be looking for further insight and guidance while others may want reassurance that they have made the best possible choice for their adviser business.

The FMA recently reported that over seven thousand advisers are associated with transitional licenses and that two thousand advisers are yet to apply.  Hear directly from Director of Market Engagement, John Botica and Principal Consultant Derek Grantham from the FMA on all that you need to know about transitional licenses. Sharon Corbett, Manager Financial Markets at MBIE and Angus Dale-Jones, Code Working Group Chair, will be part of the panel to share their insights.

The line-up of panelists provides any advice professional the opportunity to gain a better understanding of different aspects relating to transitional licenses.

Benefits of attending

  1. Hear directly from the regulator
  2. Independent industry expert insights
  3. Your licensing questions answered

How to attend

Find out more about the programme and how to register at this link.

Learn more about structuring your adviser business for the new regime

If you want an unbiased view on the right next steps from a structuring point of view, do contact us, we are happy to engage with your preferred compliance consultants to bring an industry and environmental context to your decision, or recommend either of our preferred consultants to help you make that choice. 


Legal and regulatory updates for the life and health insurance sector

21 Sept 2020 – FIU posted to its website the August 2020 AML/CFT Suspicious Activity Report.

21 Sept 2020 – The Takeovers Panel released the latest version of CodeWord, Issue 51, containing commentary on:

  • Being careful with the Code if holding shares through different entities
  • Recent guidance updates, including:
    • Schemes of Arrangement
    • Lock-up Agreements
    • Exemptions
    • Creeping Acquisitions
  • New Class Exemption – Voting Agreements for Schemes of Arrangement
  • Covid-19 Class Exemption
  • No more cheques

Legal and regulatory updates for the life and health insurance sector

15 Sept 2020 – NZ Police FIU and ACAMS issued invitations to the 2020 AML/CFT conference to be held between 10-11 November 2020, providing for both on-site and virtual conference access. https://www.police.govt.nz/advice-services/businesses-and-organisations/financial-intelligence-unit-fiu/fiu-acams-conference

17 Sept 2020 – RBNZ released the outcomes from a COVID-19 stress test of New Zealand banks. https://www.rbnz.govt.nz/news/2020/09/stress-test-reinforces-importance-of-bank-capital

18 Sept 2020 – DIA advised on its website of the release of an AML/CFT Supervisors updated enhanced CDD guideline, dated August 2020, noting also the intent to shortly publish a webinar on its website which will deep dive into the enhanced CDD obligations. https://www.dia.govt.nz/AML-CFT-Updated-enhanced-CDD-guideline


Fidelity Life licensing questionnaire, and more daily news

Fidelity Life are asking all advisers who have agencies with them to complete a licensing questionnaire. The questionnaire will allow Fidelity Life to understand what an adviser’s agency structure will be in the new regime, this will allow the insurer to continue accepting new business and paying commission. The questionnaire will be emailed out to advisers shortly and must be completed by 14 November 2020.

“So we can keep accepting your new business and paying you commission under the new adviser licensing regime, we need to know what your agency structure is going to be from 15 March 2021.

To make it easy for you we’ve developed a questionnaire. We’ll be emailing these out shortly so keep an eye out for yours.

So we have time to reflect these changes in our systems please respond by 14 November 2020.”

In other news

Fidelity Life: Building Better Businesses Live training to be held 18 September 2020

Fidelity Life: Disclosure Live: understanding the new disclosure requirements training to be held 22 September 2020

Fidelity Life: Part 1 of the online product accreditation programme, Learning HQ, is available now 

Fidelity Life: Part 2 of the online product accreditation programme, will be available in October 2020 


Legal and regulatory update for the life and health insurance sector

16 Sept 2020 – Treasury published the pre-election economic and fiscal update. https://www.treasury.govt.nz/news-and-events/news/2020-pre-election-economic-and-fiscal-update-published-today

16 Sept 2020 - MBIE released a statement that the Government planned responding to the retirement income policy review this year, but is taking further time to consider New Zealand’s retirement settings in light of the impacts of COVID-19. https://www.mbie.govt.nz/about/news/update-on-government-response-to-retirement-income-policy-review/

17 Sept 2020 – Minister of Commerce and Consumer Affairs, Hon Kris Faafoi, released a statement that the  Government is working on how New Zealand’s retirement income policies and settings can best support Kiwis in light of the COVID-19 economic recovery, with the help of the Retirement Commissioner’s latest review. https://www.beehive.govt.nz/release/economic-recovery-guides-govt-response-retirement-income-policy-review


Deloitte report on the New Zealand life insurance sector

Deloitte's report on the New Zealand life insurance sector provides a comprehensive overview of the structural differences between the New Zealand environment and the markets with which it is often compared. It provides context for the comparisons that are inevitably made as part of the debate over issues such as efficiency, commission payments, claims ratios, and channel mix. Rather than give quantitative answers to challenges - such as concerns about the level of commissions - it seeks first to explain the situation. Some assertions are made, usually about the possible causes of some features of the market, but refreshingly, without advocating for any particular prescription. Except for one: the report suggests caution. I think that is wise. Dramatic changes have been made to the Australian life insurance sector. It appears to be much the worse for them. In a sector where contracts are commitments for decades of cover, often with fixed terms, and sometimes with fixed premiums, it seems wise to exercise caution. Anyone writing a background paper for a strategy session would do well to set this as background reading or use the issues as a checklist for their decision-screens. What solutions you may bring to each of the issues, that will be up to you. Link: https://www2.deloitte.com/nz/en/pages/financial-services/articles/deloitte-issues-paper-life-insurance-sector.html#