MA releases guide to help smaller financial adviser business

MA releases guide to help smaller financial adviser businesses with the licensing process for DIMS

Following changes to the regulation of Discretionary Investment Management Services (DIMS) announced Monday 16 June, by Commerce Minister, Craig Foss, the Financial Markets Authority (FMA) has released a guide to help advisers and small businesses who want to apply for a licence to provide DIMS under the Financial Markets Conduct Act. The changes announced are designed to ensure that investors are well-protected and the regulatory regime works for smaller players in the industry.

The minister’s announcement outlines transitional arrangements for DIMS licence applications and clarifies points that were raised during consultation with the industry, including:
• Aligning the requirements for DIMS under the Financial Advisers Act 2008, with those that will apply to other DIMS providers under the Financial Markets Conduct Act 2013.
• An exemption for financial advisers who only manage their clients’ investments in limited situations, such as when they are on holiday.
• A transition period for existing DIMS, allowing them until 1 June 2015 to apply for a licence, and until 1 December 2015 to update their client documentation. New providers will need to comply from 1 December 2014.
The base licence fee for those operating a DIMS business will decrease by 40 per cent from $3,565 to $2,139.

Elaine Campbell, Director of Compliance, FMA welcomed the announcement, “these changes confirm the flexibility in the licensing arrangements for DIMS. In particular, single adviser or smaller AFA-led businesses that offer relatively straightforward services for their clients will benefit from the changes. If they need to apply for a DIMS licence they will now have more time to complete their application. Our guide helps advisers understand how small and lower-risk DIMS businesses can demonstrate to FMA that they meet the standards required for licensing.”

FMA’s ‘Quick guide to licence applications for small and lower risk businesses providing DIMS’ is intended to be used with the licensing application guide.

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