The FMA found four of FoxPlan’s representatives wrongly held out to clients that they were an authorised financial adviser or financial planner.
Wellington financial services firm FoxPlan has been censured by the Financial Markets Authority (FMA) for a series of breaches.
Following a monitoring review in late 2020, the FMA found one of FoxPlan’s nominated representatives in Auckland had provided an investment planning service to some clients since mid-2018.
Under the Financial Advisers Act, a nominated representative is an unregistered individual who was nominated by a qualifying financial entity to give its clients limited types of financial advice on a narrow range of financial products.
Only authorised financial advisers are permitted to provide an investment planning service, which involves designing a plan based on an individual’s financial situation and identification of the individual’s investment goals.
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The FMA also found four of FoxPlan’s representatives wrongly held out to clients that they were an authorised financial adviser or financial planner.
The FMA also had reason to believe FoxPlan’s authorised financial advisers failed to comply with disclosure obligations – specifically, the need to provide retail clients with a primary disclosure statement, an important document to ensure a client understood the service they were receiving.
FMA director of supervision James Greig said the case reiterated that financial advice firms could be held liable for the actions of their financial advisers.
“At the request of the FMA, FoxPlan has undertaken a number of actions to address the underlying issues around the management of the firm’s advisers and put in place measures to prevent similar misconduct in the future,” Greig said.
FoxPlan had contacted affected customers who received an investment planning service from the nominated representative, including offering them a free review of their investment plan, he said.
A financial adviser providing a service they were not permitted to carry out had the potential to lead to poor customer outcomes, such as the loss of funds, he said.
“New Zealanders put their trust and their families’ financial wellbeing in the hands of their financial advisers, so it’s critical we can be confident an adviser is appropriately qualified for the services they provide.”
FoxPlan’s breaches were significant enough to warrant a public censure but not sufficient to meet the threshold for court action, he said