Wellington financial services firm FoxPlan censored by Financial Markets Authority for malpractice
The FMA discovered that four of FoxPlan’s representatives falsely claimed to clients that they were a licensed financial advisor or financial planner.
Wellington’s financial services firm FoxPlan has been censored by the Financial Markets Authority (FMA) for a series of offenses.
Following a follow-up review in late 2020, the FMA discovered that one of FoxPlan’s appointed representatives in Auckland had been providing investment planning service to some clients since mid-2018.
Under the Financial Advisors Act, a designated representative is an unregistered person who has been appointed by a qualifying financial entity to provide its clients with limited types of financial advice on a narrow range of financial products.
Only licensed financial advisers are permitted to provide an investment planning service, which involves designing a plan based on an individual’s financial situation and identifying the individual’s investment objectives.
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The FMA also found that four of FoxPlan’s representatives falsely claimed to clients that they were a licensed financial advisor or financial planner.
The FMA also had reason to believe that FoxPlan’s authorized financial advisers had failed to comply with disclosure obligations, particularly the need to provide retail clients with a primary disclosure statement, an important document to ensure that a customer understands the service he was receiving.
FMA supervisory director James Greig said the case reiterated that financial advisory firms could be held accountable for the actions of their financial advisers.
“At the request of the FMA, FoxPlan has taken a number of steps to address the underlying issues with the management of the firm’s advisers and put measures in place to prevent similar misconduct in the future,” he said. said Greig.
FoxPlan has contacted affected clients who received an investment planning service from the designated representative, including offering them a free review of their investment plan, he said.
A financial advisor providing a service he was not authorized to provide could lead to poor outcomes for clients, such as loss of funds, he said.
“New Zealanders put their trust and the financial well-being of their families in the hands of their financial advisers, so it is essential that we can be sure that an advisor is qualified for the services they provide. “
FoxPlan’s violations were significant enough to warrant public censorship, but not enough to meet the threshold of legal action, he said.