How Financial Advisers Are Regulated in New Zealand

If you’re investing in New Zealand, understanding how financial advisers are regulated helps you choose someone trustworthy. The system is designed to protect you, but it can be confusing. This guide explains the key rules, who enforces them, and how to check if an adviser is properly licensed.

This is general information only and does not constitute financial advice. Always do your own research before making financial decisions.

Why financial adviser regulation matters

Before 2011, anyone in New Zealand could call themselves a financial adviser with little oversight. That changed with the Financial Advisers Act 2008, replaced by the Financial Markets Conduct Act 2013 (FMC Act). Today, the Financial Markets Authority (FMA) oversees all financial advice.

The goal is simple: ensure advisers act in your best interests, are competent, and are accountable. If something goes wrong, you have clear avenues for complaint or compensation.

Who regulates financial advisers in NZ?

The main regulator is the Financial Markets Authority (FMA). It sets the rules, monitors compliance, and can take enforcement action. The Reserve Bank of New Zealand also plays a role for banks and insurers that offer advice.

Additionally, the Financial Services Complaints Ltd (FSCL) and other approved dispute resolution schemes handle complaints against advisers. All licensed advisers must belong to one of these schemes.

Key regulations you need to know

Here are the main rules that apply to financial advisers in New Zealand:

  • Financial Advice Provider (FAP) licence: Every adviser or advice business must hold a licence from the FMA. This licence covers their entire advice process, from training to record-keeping.
  • Code of Professional Conduct: All advisers must follow this code, which includes duties to act with care, diligence, and integrity. It also requires them to put your interests ahead of their own.
  • Disclosure requirements: Advisers must tell you about their fees, conflicts of interest, and any limitations on their advice. You should receive a disclosure statement before receiving advice.
  • Record-keeping: Advisers must keep records of your advice for at least seven years. This includes the reasons for their recommendations.
  • Continuous professional development (CPD): Advisers must complete annual training to stay up-to-date with regulations and market changes.

Step-by-step guide to checking an adviser’s credentials

Before working with any financial adviser, follow these steps to confirm they are properly regulated:

Step 1: Check the FMA’s Financial Service Providers Register (FSPR)

Go to the FMA website and search the register. Enter the adviser’s name or business name. The register shows their licence status, the services they can offer, and any disciplinary history.

If the adviser isn’t listed, do not proceed. They may be operating illegally.

Step 2: Ask about their licence type

Advisers fall into two main categories:

  • Financial Advice Provider (FAP): The business or individual holds a licence to give advice. Most advisers you meet will be FAPs or work for one.
  • Nominated Representative (NR): An individual who gives advice on behalf of a licensed FAP. They must be registered on the FSPR.

Ask directly: “Are you a licensed Financial Advice Provider, or do you work for one?” If they hesitate, that’s a red flag.

Step 3: Review their disclosure statement

Before any advice is given, the adviser must provide a disclosure statement. This document should include:

  • Their licence number and status
  • Their fees and how they’re paid (e.g., commission, hourly rate, or fixed fee)
  • Any conflicts of interest (e.g., if they receive commissions from recommending a particular product)
  • Their complaints process and dispute resolution scheme

Read this carefully. If anything is unclear, ask for clarification.

Step 4: Confirm their dispute resolution scheme

All licensed advisers must belong to an approved scheme. The main ones are:

  • Financial Services Complaints Ltd (FSCL)
  • Insurance & Financial Services Ombudsman (IFSO)
  • Banking Ombudsman Scheme

If you have a complaint, you can take it to this scheme free of charge.

Step 5: Ask about their professional development

Advisers must complete CPD each year. Ask: “How do you stay up-to-date with changes in the market and regulations?” A good adviser will be happy to explain their training.

Types of financial advisers in NZ

Not all advisers offer the same services. Here’s a quick breakdown:

Type of adviser What they can advise on Typical fee structure
Independent Financial Adviser Products from multiple providers Fee-only (hourly or fixed) or commission
Restricted Adviser Limited range of products (e.g., only insurance) Often commission-based
Bank or KiwiSaver adviser Products from their own institution Often salary-based, no extra fee to you
Robo-adviser (digital advice) Automated portfolio management Low percentage fee (e.g., 0.5% per year)

Independent advisers generally offer the broadest advice, but may charge higher upfront fees. Bank advisers are convenient but limited to their own products.

Common fees to expect

Financial advisers in New Zealand typically charge in one of three ways:

  • Hourly rate: $150–$400 per hour, depending on experience and location.
  • Fixed fee: A one-off charge for a financial plan, often $1,000–$5,000.
  • Ongoing fee: A percentage of funds under management (usually 0.5%–1.5% per year) or a flat annual retainer.

Some advisers also earn commissions from product providers. Always ask: “How are you paid?” If they say “it’s free,” that usually means they earn commission from the products they sell.

What to do if you have a complaint

If you believe an adviser has acted improperly, follow these steps:

  1. Raise the issue directly with the adviser or their business.
  2. If unresolved, contact their dispute resolution scheme (listed in their disclosure statement).
  3. If the scheme can’t help, complain to the FMA.

The FMA can investigate and take action, including suspending or cancelling licences.

Tips for choosing a regulated adviser

  • Always check the FSPR before engaging an adviser.
  • Ask for references from current clients.
  • Prefer advisers who are transparent about fees and conflicts.
  • Consider using a fee-only adviser if you want truly independent advice.
  • Don’t be afraid to shop around — you’re not obligated to use the first adviser you meet.