Under the Financial Services Legislation Amendment Bill, advice will be able to be offered by financial advisers, FAPs or FAPs' nominated representatives.

AMP, Share and Forsyth Barr are among those planning to apply for a FAP license. That would allow them to have representatives working within that license.

Scott Black, of Share, said a final decision would be made once all the detail was available.

“We are working on the things we think we will need to have in place to apply for a licence, but we actually do most of those things anyway, and they are just best practice.”

Shane Edmond, head of private client services at Forsyth Barr, said his firm had reached the same conclusion. “Given we were early in becoming a QFE and we have 120 AFAs it would be highly likely that we would be (an FAP). Organisations who have employees as opposed to contractors, like us, are likely to go down that path.”

David Ireland, of Kensington Swan, said QFEs would be the most advanced with their systems and would be best placed to get sorted to apply for FAP status. “It’s unlikely their current processes and documentation will be a perfect fit for the new regime. But whatever the licensing requirements may be they have a bit of a head start.”

He said the other big advantage for QFEs over other groups was that when the Financial Services Legislation Bill became law, only existing QFEs would be able to engage nominated representatives under their transitional licence. Others will have to wait for a full licence.

He said only QFEs would be able to give the regime confidence that they would have the systems to oversee and control the activities of their nominated representatives. “For other groups it’s a bigger step up to deliver those systems from scratch.”

He said dealer groups and aggregators might choose to become FAPs but that would mean they were taking on a lot of the responsibilities and accountability for their financial advisers. “Can they be confident they have the systems in place to control that?”

He said comments from Commerce Minister Jacqui Dean that the regime would be simpler because there would be one FAP licence instead of ten adviser business statements might not prove correct. “That’s not a great analogy because I don’t think you get the understanding of the complexity and the hoops you might need to jump through to get your licence. It’s not just a straight numbers game. Ten ABSs are not automatically more complicated than one licence it’s quite likely the other way around."

But Ireland said there was a concerted effort to make the new regime fit the stated aim of making advice more accessible. Advisers could call the regulators out if what they introduced went against that and made it harder to offer an advice business, he said.

Sue Brown, of Sue Brown Solutions, said what was required would be revealed as the FMA developed its transitional and ongoing licensing criteria.

“The FMA’s licensing criteria tend to focus on capacity, capability and resources including processes, so I’d expect entities that have been used to operating in a licensed environment - either themselves or working with a group of AFAs - will find the switch over to the new licensing regime less of a new challenge than entities that haven’t been licensed at all and who will likely need more help getting to the starting line.”