AML/CFT Guide for Financial Advisers in New Zealand
New Zealand financial advice businesses may be reporting entities when their services include a captured financial activity, such as managing or arranging client money or investments. Advice alone is not the only question. This guide explains scope, sector risks, practical controls, examples and official sources in plain English.
How this guide was researched and reviewedOn this page
Short answer
New Zealand financial advice businesses may be reporting entities when their services include a captured financial activity, such as managing or arranging client money or investments. Advice alone is not the only question.
Scope is based on the listed activity, the ordinary-course test and the New Zealand connection. Check current regulations, exemptions and DIA guidance before relying on a result.
At a glance
Start With These Four Checks
Map the activity
Write down exactly what the business does and match it to section 5.
Know the customer
Identify the customer, beneficial owners, people acting for them and the purpose of the work.
Follow the sector risk
Build controls around how money, property, structures, products and instructions move in this sector.
Keep the evidence
Scope, CDD, risk, monitoring, reports, training and review should be easy to prove.
Plain English
Key Words Explained
These words are used in the law and official guidance. This is what they mean on this page.
- Captured activity
- An activity that brings a person or business within section 5 of the New Zealand AML/CFT Act.
- Reporting entity
- A person or business that must meet AML obligations for the covered service or activity.
- Beneficial owner
- The individual who ultimately owns or controls the customer or on whose behalf the work is done.
- Enhanced CDD
- Extra customer and source checks used when the law or higher risk requires them.
- SAR
- A suspicious activity report submitted to the New Zealand FIU through goAML when reasonable grounds for suspicion exist.
Part 1
When AML/CFT May Apply
The business should map what it actually does for a client, including any authority, transaction, custody, account or investment role. DIA supervises all reporting entities from 1 July 2026.
- Investing, administering or managing funds or money on behalf of another person.
- Arranging or carrying out a transaction that is a captured financial activity.
- Providing client-money, custody or property services within section 5.
- Issuing, managing or dealing in investments where the legal definition applies.
- Another listed financial activity carried out in the ordinary course of business.
Giving advice or a recommendation without carrying on a listed financial activity is not automatically enough. The adviser’s authority, handling of money and role in the transaction should be recorded.
Part 2
Main Risks in This Sector
These are starting points, not a ready-made risk rating. The business still needs to assess its own customers, services, countries, channels, transactions and technology.
- An adviser can lend legitimacy to unexplained wealth or unusual investments.
- Client-money authority can move value through a trusted professional.
- Complex products, trusts and companies can hide beneficial owners.
- Overseas investment and third-party funding can obscure source and purpose.
- Commercial relationships can make it harder to challenge a wealthy or long-standing client.
Part 3
A Practical Control Plan
- Step 1
Confirm scope
Map advice, arranging, transaction, client-money, custody and investment-management services separately.
- Step 2
Build the customer process
Record the section 5 and ordinary-course analysis for each service.
- Step 3
Set the risk controls
Build CDD, source and risk checks into client acceptance and transaction authority.
- Step 4
Train and connect people
Set independent escalation for unusual wealth, third parties and overseas structures.
- Step 5
Test and improve
Review advice and transaction files for scope, ownership, source and written findings.
Part 4
Worked Examples
These examples show how the scope and risk questions can be joined. They do not replace the law or the facts of a real matter.
| Situation | Why it matters | Practical response |
|---|---|---|
| An adviser recommends an investment but never handles or arranges the transaction. | The business may assume all financial advice is automatically captured. | Record the exact role and check it against section 5 and current DIA guidance. |
| A client asks the adviser to move funds into an overseas company. | The adviser may be carrying out a captured activity involving opaque ownership and source. | Confirm scope, resolve ownership and authority and complete risk-based source checks. |
| A long-standing client’s claimed wealth conflicts with public records. | The firm may rely on familiarity instead of examining the inconsistency. | Refresh CDD and source, update risk and assess suspicious activity. |
Part 5
Evidence That Should Be Easy to Find
- The section 5, ordinary-course and New Zealand connection analysis.
- The current sector risk assessment and the official sources used.
- A service map separating advice from captured transaction and money roles.
- Client authority, beneficial ownership, source and purpose records.
- Risk and approval records for overseas, trust and third-party arrangements.
- File reviews covering both advice and any transaction execution.
- Customer, beneficial ownership, risk, monitoring and reporting records.
- Training, internal review, independent assurance and remediation records.
Part 6
Common Mistakes
- Using the financial-adviser title as the scope test.
- Missing a captured activity performed after the advice.
- Relying on another provider without checking the legal reliance conditions.
- Accepting a client’s wealth statement without a risk-based assessment.
- Allowing commercial value to weaken escalation.
Helpful answers
Common Questions
Short answers to the questions businesses ask most often.
Does every business in this sector have AML/CFT duties?
No. The exact activity, ordinary-course facts and New Zealand connection decide the answer. A business may carry out both captured and uncaptured work.
What should the business do first?
Map advice, arranging, transaction, client-money, custody and investment-management services separately.
Can the sector risk assessment replace our own?
No. Official national and sector assessments are important sources, but the reporting entity must assess the risks it reasonably expects to face in its own business.
Can a generic AML/CFT template be used?
A template can help with structure, but it must be matched to the business’s scope, risks, people, systems and evidence. A document that is not implemented is not enough.
Is financial advice by itself a captured activity?
Not always. The exact service, authority and role in handling, arranging or managing money or investments should be checked against section 5.
Can a product provider’s CDD be relied on?
Only where the statutory reliance conditions are met. The adviser or reporting entity keeps responsibility for its own duties and needs access to the required records.
Reference
Official Sources
This guide cites the following sources.
- Primary lawNew Zealand LegislationAnti-Money Laundering and Countering Financing of Terrorism Act 2009
The current New Zealand AML/CFT Act, including CDD, programme, reporting, audit and record duties.
- Regulator guidanceDepartment of Internal AffairsDIA AML/CFT information and guidance
Current DIA guidance and resources for financial advice providers, advisers and client-money services.
- Regulator guidanceDepartment of Internal AffairsAML/CFT Programme Guidance 2026
Current guidance on establishing, implementing, maintaining and reviewing an AML/CFT programme.
- Regulator guidanceNew Zealand Police Financial Intelligence UnitNational Risk Assessment
The March 2025 national assessment of New Zealand money laundering and terrorism financing risk.