Do NZ New Companies Need a Financial Adviser? FMA Rules Explained

When does a new NZ company need a financial adviser?

Registering a new limited liability company in New Zealand triggers a series of financial decisions that founders are often unprepared for. Many of these decisions benefit from advice from a licensed financial professional. Understanding when advice is required, and when it is simply wise, can save significant time and money in the first year of trading.

Financial Advice Providers (FAPs) in New Zealand

Since March 2023, anyone providing regulated financial advice in New Zealand must either hold a Financial Advice Provider (FAP) licence issued by the FMA or be authorised under a licensed FAP. This applies to advice on a range of financial products including:

• Insurance (life, income protection, health, and general business insurance)
• Investment products and KiwiSaver
• Mortgages and lending products
• Shares and managed investment schemes

For new company founders, this means that the people advising them on business insurance, shareholder life cover, or investment structures must hold a valid licence. You can verify a financial adviser's status on the FMA register.

What financial decisions arise in the first 60 days

The first two months after incorporating a company typically involve several financial decisions that benefit from professional advice:

Business insurance

Most commercial leases require public liability insurance before trading begins. Professional indemnity, employer liability, and key person cover are also commonly needed in the first year. Selecting appropriate cover requires an assessment of the specific risks of the business, which is regulated advice territory.

Key person insurance

When a company is built around one or two directors with specialist skills, the business may be vulnerable if that person becomes unable to work. Key person life and trauma cover protects the business against this risk. Setting it up early, before the company accumulates significant contracts and liabilities, typically results in lower premiums.

Shareholder protection

In companies with two or more shareholders, a buy-sell agreement funded by life or trauma insurance allows surviving shareholders to purchase a deceased or incapacitated director's shares without external funding. This structure needs to be established while all shareholders are healthy.

KiwiSaver employer obligations

From the day a company employs its first staff member, KiwiSaver obligations begin. Employers must make minimum contributions of 3% of gross salary for eligible employees. While this is an accounting matter rather than financial advice, many new employers seek guidance on setting up payroll and contribution structures correctly.

Why financial advisers target new companies

For licensed financial advisers and insurance brokers, newly-incorporated NZ companies represent the highest-intent prospect available. The founders have just made a financial commitment to formalise their business. They have not yet established existing relationships with advisers. And they face genuine, time-sensitive needs that create natural urgency for a conversation.

The advisers who reach new companies in the first four to six weeks win a disproportionate share of the long-term relationships. Founders who set up their insurance, investment, and protection structures early tend to stay with the advisers who helped them do it.

FreshFirms for financial advisers and insurance brokers delivers a daily list of newly-incorporated NZ companies in your region, with director contact details and company descriptions, so you can reach new founders at the moment they most need professional advice.

Start a free 7-day trial.