How Financial Advisers Are Regulated in New Zealand

How Financial Advisers Are Regulated in New Zealand

New Zealand's financial advice regime is built on a single idea: the person giving you advice should be licensed, competent, and legally obliged to put your interests first. Getting there took a while. The current framework came in under the Financial Markets Conduct Act 2013, amended by the Financial Services Legislation Amendment Act 2019, and it only fully applied from 15 March 2021. Transitional licensing ran until 16 March 2023, and from 17 March 2023 every provider giving regulated advice to retail clients has needed a full licence from the Financial Markets Authority.

The surprising part is what licensing does and doesn't tell you. Holding a licence is meaningful. Being listed on the public register is not the same thing at all — the Companies Office does limited criminal checks when you register, and nothing else. Plenty of businesses on that register aren't licensed, aren't regulated by the FMA, and in some cases aren't even based in New Zealand.

We've set out how the regime actually works, what advisers must disclose, how they get paid, and how to check someone out before you hand over your money.

How We Researched This Guide

Everything regulatory here comes from the FMA, MBIE, the New Zealand Legislation website or the Companies Office. We read the FMA's Financial Conduct Report 2026/27, its monitoring material on licensed advice providers, the standard conditions attached to full licences, and the Code of Professional Conduct for Financial Advice Services 2025 — set out in full on legislation.govt.nz — which came into force on 1 November 2025 and replaced the first version.

On fees we hit a wall worth telling you about. There is no official New Zealand-wide survey of what advisers charge. Every "average adviser fee" you see published is invented, so we've given observed quoted ranges instead and said plainly that's what they are. The platform figures come from each provider's own published pricing.

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The Quick Summary (60-Second Version)

If you read nothing else, read this.

• To give regulated advice to retail clients, a provider must hold a full FMA licence — required since 17 March 2023.
• Advisers must disclose fees, commissions, conflicts of interest, complaints handling and any disciplinary history before advising you.
• A provider can be paid by you, by the product provider, or both. Life insurance upfront commission runs up to 200 per cent of the annual premium.
• Every licensed provider must belong to an approved dispute resolution scheme, and complaining to it costs you nothing.
• Being on the Financial Service Providers Register does not mean someone is licensed or FMA-regulated.
• Adviser fees sit on top of underlying fund fees — a 1 per cent adviser fee on a portfolio costing 0.4 per cent roughly triples your total cost.

What the Regime Actually Requires

The duties live in sections 431I to 431P of the FMC Act and apply to anyone giving regulated advice, even when they're doing it on behalf of someone else. Give priority to the client's interests. Exercise care, diligence and skill. Comply with the Code's standards for ethical behaviour, conduct and client care. Only recommend products offered in compliance with the Act. Follow the disclosure regulations so what clients are told isn't false, misleading or incomplete.

Sections 431Q and 431R add duties on top. A provider that engages someone else to give advice must take all reasonable steps to ensure that person complies with those duties. The Code's behaviour standards are short and readable: treat clients fairly, act with integrity, give suitable advice, make sure the client understands it, and protect client information.

Competence and the 2025 Code

Standard 6 requires general competence at a level equivalent to the New Zealand Certificate in Financial Services (Level 5). You can meet it through version 1, 2 or 3 of that certificate, the older National Certificate, having been an authorised financial adviser before the Code began, or by giving advice only through someone who qualifies. Standard 9 requires continuing professional development, planned and completed at least annually. The 2025 Code shifted the wording from maintaining competence to continually developing it — a small change with real intent behind it.

How Advisers Get Paid, and What You'll Pay

There are three price structures, plus a fourth model that sits alongside them. You can pay a fixed fee for a defined piece of work, an hourly rate for a discrete question, or an ongoing percentage of the money being managed. Separately, an adviser can be paid by the product provider rather than by you — common for insurance, KiwiSaver and investments, and the reason a first meeting often costs nothing.

Those ranges are quoted figures converging across independent published pricing, not market averages. No official survey exists, so nobody can honestly give you one. A percentage is also meaningless until you convert it. At 1 per cent a year, the fee is $500 on a $50,000 portfolio, $2,500 on $250,000, $5,000 on $500,000 and $10,000 on $1 million. At 0.5 per cent those figures halve. At 1.5 per cent they increase by half again.

Ask whether pricing is tiered or whole-balance. Tiered means each band is charged at its own rate, producing a blended figure. Whole-balance means crossing a threshold changes the rate on every dollar. Ask for the effective percentage and the total dollar fee at your balance, not the headline rate. Also ask about minimum fees, and whether the rate is quoted plus GST.

The Commission Question

The FMA puts life insurance upfront commission at up to 200 per cent of the annual premium including bonuses, with servicing commission of 5 to 25 per cent in later years. Clawback periods, usually two years, apply if you cancel early. An upfront commission that can equal or exceed a year's premium means the adviser is paid a multiple of the annual cost at the moment you sign. A fee-only adviser is paid by you regardless of what you buy, so the recommendation and the payment are separated.

Checking an Adviser Before You Sign

Start at the Financial Service Providers Register, run by the Companies Office. It shows registration date and status, trading and former trading names, business address, the services a provider is registered and licensed to give, the dispute resolution scheme they belong to, and which advice provider an adviser is engaged by. You can search by name or FSP number.

Then read the disclosure. It must cover the licence held, the services and product range, any limitations, fees and costs, commissions and other conflicts, complaints handling and dispute resolution, previous disciplinary history, and certain convictions or civil proceedings. For financial advisers, bankruptcy proceedings within four years of discharge also appear. The test is whether a reasonable client would expect the information to influence their decision.

Three Things People Get Wrong

First, registration is not licensing. Second, one adviser can work for more than one advice provider — legal, but it creates real confusion about how complaints and privacy are handled. Third, the FAP or authorised body engaging an adviser must link to them on the register within three months of registration, and if that doesn't happen the adviser can be de-registered.

If something goes wrong, every licensed provider must belong to an approved scheme: the Banking Ombudsman, IFSO, Financial Services Complaints Ltd, or the Financial Dispute Resolution Service run by FairWay Resolution. It costs you nothing, works like arbitration, and doesn't shut off other legal avenues. The schemes don't apply to wholesale investors.

Questions You Might Have

Is a licensed adviser the same as a registered one?

No, and this is the trap. Registration on the Financial Service Providers Register involves only limited criminal checks. It doesn't mean the business is licensed, FMA-regulated, or even based in New Zealand. If you deal with an unlicensed provider, recovering your money is very unlikely — especially if they're offshore.

What does "fee-only" actually mean?

The client pays the adviser directly and the adviser takes no commission from product providers. That separates the recommendation from the payment. It doesn't automatically make the advice better or cheaper — it means you can see exactly what you're paying and to whom.

Can I complain without going to court?

Yes. Take it to the adviser's dispute resolution scheme, which is named in their disclosure documents. You can go there at any time, though the scheme may check you've tried resolving it directly first. Any resolution is confidential, and compensation is capped.

Do I need an adviser at all?

Not necessarily. The FMA's own investor material supports DIY investing through licensed platforms, which must be registered, belong to a dispute resolution scheme, and meet anti-money-laundering obligations. The FMA has found no systematic relationship between fees charged and returns received, so paying more doesn't buy better performance.

How do I spot a scam?

Anyone who calls or messages you out of the blue with an investment offer is a hard pass. The FMA publishes investor warnings naming companies and websites to be wary of — though it only lists ones it's been told about. Watch for ads promising high returns with little explanation of the risks, and don't chase past performance.

What Matters Most

The regime's design assumption is that disclosure plus duties manage conflicts rather than ban them. That arms you with information instead of removing the conflict, which means the disclosure document is the document that matters. Read it before you sign anything.

Understand what you're paying in dollars, not percentages. Ask whether the fee is tiered or whole-balance, whether GST is included, and what you actually receive each year for any ongoing commission. Then apply the FMA's value-for-money test: does this service demonstrably help you make better decisions, or demonstrably benefit your account?

Check the register, check the licence, and don't be afraid to walk away from the first adviser you meet.