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Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Additional regulation of financial advice and financial advice services - Interpretation

431C: Meaning of financial advice and regulated financial advice

You could also call this:

"What is financial advice and when is it regulated?"

Illustration for Financial Markets Conduct Act 2013

You give financial advice when you make a recommendation or give an opinion about buying or selling a financial product. This can include things like telling someone to invest in something or to switch funds within a managed investment scheme. You also give financial advice when you design an investment plan for someone that is based on their financial situation and goals.

When you give financial advice, it is called regulated financial advice if you do it as part of your business and it is not excluded under certain rules, which are set out in clauses 8 to 18 of Schedule 5. However, some things are not considered financial advice, which are set out in clause 7 of Schedule 5.

You need to remember that there are some exceptions to these rules, which can be found in a declaration under section 562(1)(gb).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS465785.

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431B: Additional purpose of subpart, or

"This law also helps make sure you get good advice about money."

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431D: When financial advice service is provided, or

"When you give money advice to clients as part of your business"

Part 6Licensing and other regulation of market services
Additional regulation of financial advice and financial advice services: Interpretation

431CMeaning of financial advice and regulated financial advice

  1. A person gives financial advice if the person—

  2. makes a recommendation or gives an opinion about acquiring or disposing of (or not acquiring or disposing of) a financial advice product; or
    1. makes a recommendation or gives an opinion about switching funds within a managed investment scheme; or
      1. designs an investment plan for a person that—
        1. purports to be based on—
          1. an analysis of the person’s current and future overall financial situation (including investment needs); and
            1. the identification of the person’s investment goals; and
            2. includes 1 or more recommendations or opinions on how to realise 1 or more of those goals; or
            3. provides financial planning of a kind prescribed by the regulations.

              1. However, a person does not give financial advice merely by doing 1 or more of the things set out in clause 7 of Schedule 5.

              2. Financial advice is regulated financial advice if—

              3. it is given in the ordinary course of a business; and
                1. it is not excluded under any of clauses 8 to 18 of Schedule 5.

                  1. Subsections (1) and (3) are subject to a declaration under section 562(1)(gb).

                  Notes
                  • Section 431C: inserted, on , by section 29 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).