The Ministry of Business, Innovation and Employment has provided more detail about the new licensing regime.

The cost of a full licence will range from $612 to $922, depending on the size and structure of a financial advice provider.

The FMA will also charge an hourly rate when assessing a licence application is more complex than would normally be the case for a particular business type.

There will also be FMA levies to pay.

In submissions received before the fees were set, the Financial Services Council warned the hourly fee model could be risky.

“We note there is no definition of ‘complex’. This leaves open the risk that the licensing fee proposal will fail in its objective of limiting uncertainty to applicants as to the likely total amount of the fees they will be required to pay.

“We understand anecdotally that existing Financial Markets Conduct Act licence-holders were charged materially more than the stated licence fee when hourly rates were included. It is important that fees represent what will actually be charged, so they do not mislead applicants.”

Chief executive Richard Klipin said his members wanted it to be possible to proceed straight to full license application, if a business was ready.

Share agreed hourly rates created uncertainty. The group called for controls to ensure application assessment was efficient.

There was also industry concern about how single-adviser businesses would be dealt with.

The Triple A Advisers Association said there should be a licence fee category for a single adviser business with a nominated representative because many sole-adviser firms had staff who helped them look after KiwiSaver clients. Advisers might want to upskill them to work as nominated representatives.

Financial Advice NZ said many single-adviser businesses were small and “very cost-sensitive”.

Providing relief to single adviser businesses will help to reduce the barriers for new businesses entering the sector and will ensure reduced compliance costs for existing small adviser businesses. It may be worthy to consider a model where there is a package for a single adviser business.”

But G3 Financial Freedom said it did not seem appropriate to give relief to single-adviser businesses when there were so many business models.

MBIE has said it expects all QFEs to become financial advice providers with nominated representatives but Triple A said that was not a correct assumption.

“Many of our members who are currently QFE members of life insurance companies were advised before 25 December 2018 that they will not be invited to become nominated representatives of that Life Insurance company, for which they are currently in as a QFE.”

The conduct report into the insurance sector by the FMA and Reserve Ban had put some off taking on the responsibility, the group said.