FMA Director of Market Engagement John Botica says the tools are a response to market feedback and have been designed to assist providers to address gaps in their existing compliance approach.
The tools take the form of a checklist, which advice providers can use to assess their existing business practices. Used in conjunction with the full licence application kit, the tools aim to give transitional licence holders the confidence to apply for a Class 1 or Class 2 full licence.
“We recognise that the requirements of full licensing can seem like a big step up, particularly for smaller advice businesses,” Mr Botica said.
“These tools are designed to help them identify the aspects of their business where they’re already compliant, as well as those areas where they might need to do a bit more work in order to apply for a Class 1 or Class 2 full licence.”
The availability of the tools comes after the FMA announced last month all transitional financial advisers should apply for their Class 1 or Class 2 full licences by September 30 next year. For Class 3 licence applicants, the target date is June 30.
New laws governing the financial advice sector commenced in March this year, requiring advisers who service retail clients to hold or operate under a Financial Advice Provider (FAP) licence.
“Every advice firm is different, and the new regime recognises that,” Mr Botica said.
“We hope these tools will help encourage financial advice providers to assess their own level of compliance and respond to the obligations and requirements in a way that suits their businesses – and customers – best.”
All FAP transitional licences expire on March 16 2023. As of October 18, about 1706 financial advice providers were still operating under transitional licences, according to the FMA.
The three self-assessment tools focus on three of the seven standard conditions that apply to FAP full licences: record keeping; cyber security and business continuity planning; and key outsourcing arrangements.
FMA says more self-assessment tools will be available in the coming months.
Click here for the record-keeping checklist, here for cyber security/business continuity and here for outsourcing.