Those applying for Class 1 or Class 2 licences have until September 30, 2022, to put their application in, while those applying for a Class 3 licence have until June 30, 2022.
The announcement has been praised by Financial Advice New Zealand saying it gives more certainty to advisers.
In response to the new regulatory regime, the FMA has been building resources to support providers of financial advice.
A dedicated financial advice team has been established, with 11 staff today and plans to recruit a further seven by the first quarter of 2022. This also includes recruiting for another person to join its licensing team.
FMA director of market engagement John Botica says the target dates aim to help providers plan for a smooth transition to full licensing and were based on trends observed through the transitional licensing process.
“With transitional licensing, 18 per cent of those applying for a transitional licence left it until the last fortnight before the deadline closed. That just won’t be an option with full licensing. We thought it important to be clear about that well ahead of time.”
All financial advice provider (FAP) transitional licences expire on March 16, 2023, and by getting applications in before the relevant target date, applicants would give themselves the best chance of ensuring their full licence is processed before their transitional licence expires.
“We recognise that advice businesses are currently facing demands on many fronts and managing competing priorities," Botica says.
"By setting clear application target dates, we hope to signpost sensible timeframes for transitional licence holders to aim for and achieve.”
As of Monday this week, 1706 financial advice providers were still operating under transitional licences.
While Botica expects not all will decide to apply for a full licence, he says the FMA is committed to providing those who did with as much support as possible.
Financial Advice NZ chief executive Katrina Shanks says the FMA has made positive steps forward and that the industry and regulators have been working together to make sure no one gets left behind.
She says adviser feedback about licencing has also been positive and that businesses have been using the application process to fine-tune their policies and processes.
"Every business needs to go thought this and make sure what they are doing is fit for purpose - applying for a full licence will only strengthen your business."
In addition to the FAP full licence application kit and other resources available on its website, the FMA is developing self-assessment tools to help Class 1 and Class 2 licence applicants identify where they might need to do further work to meet the full licensing requirements.
A Cyber Security and Business Continuity Planning (BCP) self-assessment tool has recently been published on the FMA website and more will be added.
Botica urged advice businesses who had not yet begun their transition journey to get started soon.
“Download the FAP full licence application kit, decide which licence class to apply for and then start a draft application online.
"That’s the quickest way to find where any gaps in your current compliance approach are. Once you’ve identified those gaps, you can plan to address them and get your full licence application in by the target date.”