Plying one’s trade between Australia and New Zealand is traditionally the preserve of rugby players and winemakers but now financial advisers have the green light to join them.
The Australian Securities and Investments Commission (ASIC) and New Zealand’s Financial Markets Authority (FMA) have announced mutual recognition arrangements for Australian and New Zealand financial advisers.
A tweak to the rules will enable financial advisers to provide services in each other’s countries based on the qualifications and experience they have obtained in their home country.
While Trans-Tasman Mutual Recognition legislation already applies to Australian financial services licence holders, most of these are companies rather than individuals.
To enable individual financial advisers with relevant qualifications to operate on either side of the Tasman, both regulators recognised a need for a different mechanism based on the spirit of that legislation.
“The mutual recognition arrangements will strengthen the Australian and New Zealand financial services industries by increasing competition and lowering transaction costs,” said ASIC chairman, Greg Medcraft, in a statement.
“We hope many financial advisers here and in New Zealand take advantage of this new arrangement.”
Compliance, exemption and restrictions across the Tasman
FMA has granted an exemption for Australian qualified advisers allowing them to apply to be authorised financial advisers (AFAs) in New Zealand based on their existing Australian qualifications.
Australian advisers who hold the specified qualifications will be exempt from the educational qualifications requirements for AFAs and will be able to hold a licence relevant to their practice area and qualifications in Australia.
The exemption is also subject to a number of other restrictions and conditions, such as compliance with the New Zealand Code of Professional Conduct for AFAs.
“The announcement is a significant step which supports our mutual desire for a more dynamic single economic market between New Zealand and Australia – particularly in financial services,” said FMA chief executive Sean Hughes.
“The existing strong working relationship between FMA and ASIC will be enhanced through our respective implementation of these mutual recognition arrangements across the Tasman.”
To enable New Zealand AFAs to operate in Australia, ASIC has amended its regulatory guides, which set out the minimum training requirements for individual financial advisers in Australia.
Recognition has been given to New Zealand AFAs and Qualifying Financial Entity (QFE) advisers to enable them to practise in Australia in certain areas.
The trans-Tasman mutual recognition of financial advisers will take effect from July 6, 2012.
Improving standards
In related news, The Financial Planning Association (FPA) has called for more clarity on the ASIC proposal to implement a national exam for financial planners.
“There are a number of areas that need some clarification in the release, including the standards the proposed exam will meet and the proposal of a self-regulatory organisation,” said Mark Rantall, chief executive of the FPA.
“The FPA acknowledges that the current RG146 standard is below par and agrees that a higher national standard needs to be set to build the trust of consumers.”
