From 15 March 2021 New Zealand financial advice providers (FAPs) and their financial advisers have new disclosure obligations. Those obligations apply before they engage with retail clients and during the process of providing financial advice to retail clients. Cygnus Law’s Guide to Financial Advice Service Disclosure summarises the new disclosure obligations and provides guidance on how to apply them. The guide considers disclosure obligations of FAPs that engage financial advisers to give financial advice.
The new disclosure obligations replace requirements to provide static & inflexible disclosure documents under the Financial Advisers Act. Under the new disclosure regime there are no mandated disclosure documents- there is significant flexibility with respect to how disclosure is made. This supports FAPs & their advisers to implement disclosure in a way that ensures clients are best able to engage with the information provided.
Under the new disclosure regime information must be disclosed in relation to the following matters (with some differences at each disclosure stage):
- The identity and address of the FAP and the identity of the financial adviser
- The regulated status of the FAP (either licensed, an authorised body or exempt)
- The nature & scope of advice provided (and limitations) including details of products advised on
- Commissions and other incentives (where material)
- Other conflicts of interest (where material)
- Fees charged to the client
- Disciplinary history (if relevant)
- The internal complaints process and details of the dispute resolution scheme
- Legal duties of the FAP and adviser
Disclosure is required at four stages:
- At all times (on the FAP’s website, if it has one) or on request
- When nature/scope of financial advice is known
- When financial advice is given
- When there is a complaint
Cygnus Law can advise you on your specific disclosure obligations and on how to implement them. Contact Simon Papa on 022 644 7193 or at firstname.lastname@example.org.