An understanding of the Financial Advisers Act 2008 is essential for all members making investment decisions or transactions on behalf of their clients. Due to recent changes to the Act, some activities may require authorisation or registration.
The legislation covers the following business activities:
- Giving financial advice - to make a recommendation, or give an opinion to a client in relation to the acquiring or disposing of a financial product.
- Providing an investment planning service - to design (or offer to design) for a client a plan which analyses an individual's overall current and future financial situation (including investment needs), identifies their investment goals and gives a recommendation or opinion on how to realise some or all of those goals.
- Providing a discretionary investment management service - to decide which financial products to acquire or dispose of on behalf of a client, while acting under an authority granted to them (or their employer or principal) to manage some or all of the client's holdings of financial products.
Members should also be aware of the two main potential exemptions that exist for NZICA members:
- Members (only those who are Chartered Accountants) will not be considered to be providing financial adviser services when providing services in the ordinary course of business as a CA. If this exemption applies in the specific set of circumstances then the member is not required to register or become authorised to provide the relevant services.
- A service provided as an incidental part of a non-financial service is deemed not to be a financial adviser service. A service is "incidental" if it is carried out to facilitate the CA business, or is ancillary to the CA business. If this exemption applies in the specific set of circumstances then the member is not required to register or become authorised to provide the relevant services.
Members should seek legal advice, or contact NZICA, if they require assistance with their own particular circumstances. In all cases NZICA's Code of Ethics applies and members must ensure they are competent to undertake the services they are being asked to provide.
For more information, please review 2010 Chartered Accountants Journal articles for detail around which activities might constitute regulated financial advice and or whether and exemption may apply to your specific circumstances.
Become an Authorised Financial Adviser
As part of the requirements for applicants to become an Authorised Financial Adviser, the Securities Commission requires that individuals secure a signed testimonial form from their membership body. For NZICA members the form needs to be completed and signed in part 1 and then submitted for processing. Upon completion NZICA will return the completed form to the member so that they can include it with their application to the Securities Commission.
Testimonial form for NZICA members (DOC)
Financial Markets Authority website
Still got questions?
View our financial adviser FAQs or contact our Customer Service Centre.