Inside Money: The incomplete guide to financial services providers

The Financial Services Provider Register is now coming under the responsibility of the FMA. Photo / Thinkstock

What's amazing about the government's latest upgrade to the financial services provider regime is that the sector's regulator didn't already have the authority to directly control the registration process.

Under new rules released by Commerce Minister, Craig Foss, this week , the Financial Markets Authority (FMA) now has the power to "direct the [Financial Services Provider] Registrar to decline registration or to de-register an FSP where the FMA is not satisfied that registration is necessary or desirable".

Previously, ultimate authority for the FSP registration process rested with the Companies Office Registrar who could only remove entities from the list on the following grounds:

• the Registrar has been notified that an FSP is no longer operating or qualified to operate;

• an FSP bas been registered because of false or misleading information;

• fees are dishonoured, declined, or reversed; or

• the annual confirmation is not filed.

The FSP register, which began full operations in 2011, is intended to collect New Zealand's entire financial services industry under a single, digital roof.

Given that the FMA is responsible for stamping approval on the largest FSP sector, authorised financial advisers (AFAs), clearly the regulator did have a large influence on who made it on to the register in the first place - but not so much when it came editing out offending entities.

The new rules will no doubt speed up the FSP deregistration process for those like the temporarily-suspended AFA, David Ross, who come to the FMA's attention. As it happens, David Ross was deregistered as an FSP only on February 22 this year (as well as his firm Ross Asset Management), despite being first mentioned in FMA dispatches last November.

Although the FSP register is generally pretty good (and I recommend you check out all the financial services providers in your life here), there isn't much info on the reason for Ross' deregistration, which is a big oversight. For example, inattentive searchers could easily confuse David with Duncan Ross, who was also deregistered last October for what may be entirely innocent reasons.

There are a few other holes in the register too. It is impossible, for instance, to see how many advisers are acting under the auspices of Qualifying Financial Entities (QFEs), rather than as AFAs. This is important as QFE advisers can sell the entire range of their home-brand products without requiring AFA registration.

Furthermore, the FSP register doesn't include as a distinct group the, somewhat ironically-named under the circumstances, registered financial advisers (RFAs). RFAs, which encompass mortgage brokers, insurance advisers etc, are the most numerous group of financial advisers in the country - although exactly how numerous remains a secret, probably buried in an FMA spreadsheet for reasons known only to a select few.