Is the Authorised Body Model working?

As all adviser businesses head to full licensing, now’s the time for Authorised Bodies in the Life Risk sector to evaluate what’s next for them.

There are some AB’s who are now looking for more control of their business, flexibility and access to a wider and more effective range of tools and resources to make the move to holding their own licence. Join a network that can provide the support you value as an Authorised Body but at the same time enables you to drive your business forward.

The original attraction of the Authorised Body model for many Life Risk advisers was that it seemed to offer the best of both worlds. Adviser businesses would retain their autonomy while relying on the safety net of a larger organisations’ licence and their compliance support and systems.

Are the legal and fiduciary requirements restricting Authorised Bodies?

Authorised Bodies are not able to opt out of their legal and fiduciary requirements and the full License holder wants to manage their risks so some Authorised Bodies have found they are compelled to comply strictly to the operational and advice processes, procedures and controls of the FAP license holder even when they feel the advice process and tools aren’t market leading or are limiting the market segments they can give advice to.


It is totally appropriate for the FAP License holder to enforce compliance on its Authorised Bodies as the FAP carries non-compliance risks of its Authorised Bodies and a key control is to demand adherence to their way of doing things. Costs associated with compliance management may also be more costly than Authorised Bodies expected because the FAP imposes more oversight and auditing to identify and manage risk.

We believe that the benefits of being an authorised body may not be as significant as many thought but that also, the risks and costs of full licensing for small adviser businesses were overstated.  We have observed that in some situations the AB model has limited the ability for an AB to really grow their business and achieve their own business goals.

Many Authorised Bodies in the Life Risk sector are already in a place where they can manage their own compliance and regulatory requirements with the right support.

We are committed to ensuring that our members have a cost-effective way of accessing the right technology, training and services so they can give better advice safely in Personal and Business Risk and have a partner to support them to Full licencing and beyond.

This means that you can focus on what you do best, building strong client relationships, providing great advice and achieving your business goals.

If you are considering your options and wondering if you should make the change from an Authorised Body to Full licensing, come talk to us today.

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Disclosure for articles written by Cecilia Farrow:  Cecilia Farrow is the Practitioner Director for Risk on the Financial Advice New Zealand Board.  The views expressed in this article are solely hers and are not intended to represent the views of Financial Advice New Zealand