28 Jul 2021

FoxPlan censured by FMA for breach of financial advice rules

6:38 pm on 28 July 2021

A Wellington financial services firm has been censured by the regulator for allowing its staff to give advice when they were not qualified to offer.

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Photo: 123RF

The Financial Markets Authority (FMA) found advisors at FoxPlan provided investment planning services, which can only be offered by someone registered as an Authorised Financial Advisor.

Employees at the firm were also thought to have represented to clients that they were in fact qualified, and the firm is believed to have failed in its obligation to provide clients with a disclosure statement.

"This case reiterates that financial advice firms can be held liable for the actions of their financial advisers," FMA director of supervision James Greig said.

In response to the findings of the FMA's review, the company had moved to fix its processes and make good with its clients.

"A financial adviser providing a service they are not permitted to carry out is a considerable issue because it has the potential to lead to poor customer outcomes, such as the loss of funds from inadequate service," Greig 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."

The breaches were considered by the FMA to be serious enough to warrant public censure, but did not meet the threshold for court action.