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How best to structure your business to operate as a financial advice provider under the new regime is a pivotal decision.

Much of the debate has centred around the human aspect of financial advice delivery – should you have financial advisers or nominated representatives, or a mix of both, and can financial advisers advise on behalf of more than one provider? These are important considerations, but they sidestep one of the biggest leaps forward made by the new regime: the ability for a corporate to give personalised advice without a human face.

In brief:

In this eleventh in our Series of Financial Law Insights working through the detail of the Financial Services Legislation Amendment Bill we discuss how advice services can be provided by corporate entities, including:

  • Opening the door to corporate advice, including digital advice
  • Thinking about the way you want to deliver financial advice to your clients
  • The licensing implications of incorporating corporate advice into your advice delivery model.

In the Series so far:

1 – confirmation of the proposed reforms
2 – key concepts
3 – the FAP conundrum
4 – key changes to the FSP Act
5 – transitioning to the new regime
6 – offshore advisers
7 – the Code of Conduct and Code Working Group
8 – the new regime for custodial services
9 – the new statutory conduct obligations
10 - the scope of the new regime

In full:

To recap, under the Financial Advisers Act 2008 (‘FAA’) only natural persons can give personalised financial advice. This restrictive position was, until very recently, compounded by the added complication of the FMA’s very broad view of when personalised advice will be provided, expressed in its original KiwiSaver Advice guidance note.

The downside has been that individuals have struggled to access personalised financial advice. This position has been widely recognised as a bad consumer outcome.

The proposed digital advice exemption, released for consultation on 16 November 2017, will provide opportunity for providers to accelerate plans for digital personalised advice (read our initial thoughts on the exemption here). However, the exemption will be only a partial interim solution to the issue of corporate financial advice provision. The Financial Services Legislation Amendment Bill (‘FSLAB’) will go further by fully enabling corporate advice, without necessarily imposing the same number of hoops contemplated by the proposed exemption.

Under FSLAB, a person provides a ‘financial advice service’ if regulated financial advice is given in the ordinary course of his, her, or its business. The service can be given on the person’s own account or by someone else on behalf of that person (by a nominated representative or a financial adviser).

What is corporate advice?

The new definition is both person/entity and technology neutral. The complete shift away from the human component required to give personalised advice currently enshrined in the FAA opens up a number of new ways to provide financial advice.

Passing on financial advice given by another person continues to be expressly excluded from the definition of financial advice under the reforms. This means corporate advice (which is financial advice) can be passed on to a client by an individual who has been neither registered, nor nominated by their provider as a ‘nominated representative’. That is because the individual is not giving financial advice. This could include brochures or analysis reports produced by the entity that recommend a particular product for specific circumstances. Care needs to be taken to ensure the individual does not hold the advice out as their own, but just because an individual is involved in dispensing a provider’s advice it doesn’t mean the individual needs the status of financial adviser or nominated representative.

Another example: corporate advice could be delivered in the form of automated advice given by an algorithm after chewing through a series of data inputs about a consumer’s financial position and goals – this is digital advice or ‘robo-advice’.

These new options don’t mean you have to do away with the human face of advice. Instead, the new regime enables financial advice providers to consider and use a much wider variety of methods to provide advice to their clients. ‘Corporate advice’ becomes a viable comprehensive alternative to individual advice.  

Planning your advice proposition

The new regulatory regime sets the bar for providing financial advice services in the retail space a lot higher than the FAA did. With new methods of providing advice available, and some work involved to obtain a licence, there is an opportunity for financial advice providers to completely rethink the way they want to structure their financial advice proposition.

International trends are converging towards a hybrid approach to providing advice, mixing human and digital, as the preferred set up. Ultimately, the increased choice of methods for providing advice gives providers a greater ability to shape their destiny – whether with people on the frontline or not, and whether those people actually provide the financial advice or not.


Once you’ve decided on your preferred advice provision mix, you’ll need to translate that into a licence application.

Under FSLAB, anyone who provides financial advice, including any corporate advice or robo-advice solution, will need to operate under a licence. Financial advice provider licence applications will need to demonstrate that appropriate policies, procedures, and controls are in place such that the prospective licensee is confident that the resulting advice will comply with requirements. Decisions made as to the structure for delivering financial advice will determine what needs to be included. More on that in a future edition in this Series.


The policy decision to enable the provision of corporate advice has been made. The question is, how will you choose to provide advice to your clients? Will you have human-provided advice, a human face passing on entity advice, a robo-advice solution, simple corporate advice with no human delivery involved, or a mix of one or more of those?

The new regime provides a plethora of mix-and-matchable options for financial advice delivery for providers to choose from. Thinking about the appropriate mix for your business proposition now will enable you to engage more meaningfully in future phases of the reform process, potentially allowing you to influence the outcome to ensure it accommodates your preferred model. For those thinking of placing greater reliance on corporate advice, the months ahead are shaping up as interesting times.

Start a conversation

If you would like a specific briefing on the Bill, what the proposed reforms may mean for your business, and what you can do now to plan for the new regime, please contact Catriona Grover on +64 4 498 0816, David Ireland on +64 4 498 0840, Hayley Miller on +64 9 915 3366,  Nick Summerfield on +64 9 915 3357, Karen Mace on +64 4 496 5941, or Tom McLaughlin  on +64 4 498 0886, or email the team at



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Tom McLaughlin
Tom McLaughlin

Senior Associate


+64 4 498 0886


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