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Authorised Body (AB) vs FAP licencee - What’s the difference?

Warwick Slow

20/05/2024

AB vs. FAP

In the new FSLAA regime, there is a lot of industry noise about licensing structures and what they mean for your business.

One the most common debates is between being an Authorised Body (AB) or a FAP licencee. 

In this article we will look at the common questions and myths that surround both structures.

If I’m an Authorised Body under an aggregator’s FAP licence, does that mean I don’t have to do compliance?

In short, no. You have the same regulatory obligations as a FAP licence holder. 

Authorised Bodies are required to have the same goverence controls in place and are held to the same standards as a FAP licencee. 

Applying for your licence is expensive?

The licence application costs roughly $900 and is a one-off cost. You will need to pay your FSPR renewal costs which is the same whether you’re an AB or a full licence holder.


If you’re registering a new business on the FSPR there is a charge of around $1000. You will not need to pay this if your business entity is already registered.

How long does the full licence process take? 

The full licence application usually takes around 30 minutes to complete and between 1-3 weeks for a response back from the FMA

Members of the Kiwi Adviser Network (KAN) will have support of our compliance team to apply at no additional cost.

What other work is involved up front?

To be ready to apply for your licence, you will need to have met the key licensing requirements.

In the FAP licence application, it will ask you when you last reviewed these key policices (e.g Complaints Handling policy) and when you will review them next.

Members of KAN will have access to our standard policies and processes that can be adjusted to best fit your business. This is at no additonal cost and a member of the KAN compliance team will work with you to create a compliance assurance plan (CAP) that is the right fit for your business.

I heard that being an AB is safer due to the licence holder taking the risk

This isn’t exactly true. In an AB model, the liability is shared between the licence holder and the AB. 

This means that the licence holder must be held accountable for maintaining compliance for all ABs under their licence. 

This has a consequence that means that as the number of ABs under a FAP licence increases, so does the risk. When risk increases, so do controls and processes.

AB’s do not get included in FMA monitoring visits

This isn’t the case and depending on the size of the FAP that the AB is part of, they may be selected to be included as part of a monitoring visit.

As an AB, my compliance is just sorted

Your FAP licencee will give you the framework to be compliant, however, you still need to do the work. 

At KAN, the team provides support to the members' businesses, regardless of their licensing structure to make sure they’ve got a compliance plan that fits the unique needs of their business.

What next?

Navigating the differences between being an Authorised Body (AB) and a FAP licence can be complex. Both structures have similar compliance requirements and obligations.

We hope this clears up some misconceptions about the differences and what each structure entails.

Ultimately there is no one-size-fits-all solution, so it's important to get tailored advice to determine the best structure for your business.


For more on what a Financial Advice Providers is, click here!

AB vs. FAP

In the new FSLAA regime, there is a lot of industry noise about licensing structures and what they mean for your business.

One the most common debates is between being an Authorised Body (AB) or a FAP licencee. 

In this article we will look at the common questions and myths that surround both structures.

If I’m an Authorised Body under an aggregator’s FAP licence, does that mean I don’t have to do compliance?

In short, no. You have the same regulatory obligations as a FAP licence holder. 

Authorised Bodies are required to have the same goverence controls in place and are held to the same standards as a FAP licencee. 

Applying for your licence is expensive?

The licence application costs roughly $900 and is a one-off cost. You will need to pay your FSPR renewal costs which is the same whether you’re an AB or a full licence holder.


If you’re registering a new business on the FSPR there is a charge of around $1000. You will not need to pay this if your business entity is already registered.

How long does the full licence process take? 

The full licence application usually takes around 30 minutes to complete and between 1-3 weeks for a response back from the FMA

Members of the Kiwi Adviser Network (KAN) will have support of our compliance team to apply at no additional cost.

What other work is involved up front?

To be ready to apply for your licence, you will need to have met the key licensing requirements.

In the FAP licence application, it will ask you when you last reviewed these key policices (e.g Complaints Handling policy) and when you will review them next.

Members of KAN will have access to our standard policies and processes that can be adjusted to best fit your business. This is at no additonal cost and a member of the KAN compliance team will work with you to create a compliance assurance plan (CAP) that is the right fit for your business.

I heard that being an AB is safer due to the licence holder taking the risk

This isn’t exactly true. In an AB model, the liability is shared between the licence holder and the AB. 

This means that the licence holder must be held accountable for maintaining compliance for all ABs under their licence. 

This has a consequence that means that as the number of ABs under a FAP licence increases, so does the risk. When risk increases, so do controls and processes.

AB’s do not get included in FMA monitoring visits

This isn’t the case and depending on the size of the FAP that the AB is part of, they may be selected to be included as part of a monitoring visit.

As an AB, my compliance is just sorted

Your FAP licencee will give you the framework to be compliant, however, you still need to do the work. 

At KAN, the team provides support to the members' businesses, regardless of their licensing structure to make sure they’ve got a compliance plan that fits the unique needs of their business.

What next?

Navigating the differences between being an Authorised Body (AB) and a FAP licence can be complex. Both structures have similar compliance requirements and obligations.

We hope this clears up some misconceptions about the differences and what each structure entails.

Ultimately there is no one-size-fits-all solution, so it's important to get tailored advice to determine the best structure for your business.


For more on what a Financial Advice Providers is, click here!

AB vs. FAP

In the new FSLAA regime, there is a lot of industry noise about licensing structures and what they mean for your business.

One the most common debates is between being an Authorised Body (AB) or a FAP licencee. 

In this article we will look at the common questions and myths that surround both structures.

If I’m an Authorised Body under an aggregator’s FAP licence, does that mean I don’t have to do compliance?

In short, no. You have the same regulatory obligations as a FAP licence holder. 

Authorised Bodies are required to have the same goverence controls in place and are held to the same standards as a FAP licencee. 

Applying for your licence is expensive?

The licence application costs roughly $900 and is a one-off cost. You will need to pay your FSPR renewal costs which is the same whether you’re an AB or a full licence holder.


If you’re registering a new business on the FSPR there is a charge of around $1000. You will not need to pay this if your business entity is already registered.

How long does the full licence process take? 

The full licence application usually takes around 30 minutes to complete and between 1-3 weeks for a response back from the FMA

Members of the Kiwi Adviser Network (KAN) will have support of our compliance team to apply at no additional cost.

What other work is involved up front?

To be ready to apply for your licence, you will need to have met the key licensing requirements.

In the FAP licence application, it will ask you when you last reviewed these key policices (e.g Complaints Handling policy) and when you will review them next.

Members of KAN will have access to our standard policies and processes that can be adjusted to best fit your business. This is at no additonal cost and a member of the KAN compliance team will work with you to create a compliance assurance plan (CAP) that is the right fit for your business.

I heard that being an AB is safer due to the licence holder taking the risk

This isn’t exactly true. In an AB model, the liability is shared between the licence holder and the AB. 

This means that the licence holder must be held accountable for maintaining compliance for all ABs under their licence. 

This has a consequence that means that as the number of ABs under a FAP licence increases, so does the risk. When risk increases, so do controls and processes.

AB’s do not get included in FMA monitoring visits

This isn’t the case and depending on the size of the FAP that the AB is part of, they may be selected to be included as part of a monitoring visit.

As an AB, my compliance is just sorted

Your FAP licencee will give you the framework to be compliant, however, you still need to do the work. 

At KAN, the team provides support to the members' businesses, regardless of their licensing structure to make sure they’ve got a compliance plan that fits the unique needs of their business.

What next?

Navigating the differences between being an Authorised Body (AB) and a FAP licence can be complex. Both structures have similar compliance requirements and obligations.

We hope this clears up some misconceptions about the differences and what each structure entails.

Ultimately there is no one-size-fits-all solution, so it's important to get tailored advice to determine the best structure for your business.


For more on what a Financial Advice Providers is, click here!