The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko – has formally censured Wellington-based financial
services firm FoxPlan Ltd, after one of its nominated representatives provided services he was not permitted to give and
other representatives offered services to clients they were not permitted to give.
Following a monitoring review in late 2020, the FMA found one of FoxPlan’s Auckland-based nominated representatives¹ had
provided an investment planning service to some clients since mid-2018. Under the Financial Advisers Act (FA Act) 2008,
only Authorised Financial Advisers (AFA) were permitted to provide this service, which involves designing a plan based
on an individual’s financial situation and identification of the individual’s investment goals.
Additionally, the FMA found four of FoxPlan’s representatives wrongly held out to clients that they were an AFA or
financial planner. Separately, the FMA had reason to believe FoxPlan’s AFAs failed to comply with disclosure obligations
- specifically, the need to provide retail clients with their primary disclosure statement (PDS), an important document
to ensure a client understands the service they are receiving.
James Greig, FMA Director of Supervision, said: “This case reiterates that financial advice firms can 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. FoxPlan has
established an action plan and is currently implementing that plan to address the issues identified. FoxPlan has
contacted affected customers who received an investment planning service from the nominated representative, including
offering them a free review of their investment plan.
Mr Greig said: “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. 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.
“We considered FoxPlan’s breaches were significant enough to warrant a public censure but not sufficient to meet the
threshold for court action. A public censure holds an entity to account while serving as an important reminder of firms’
obligations.”
The FMA was satisfied FoxPlan likely breached sections 17, 20A, 20B and 22 of the FA Act, which was repealed and
replaced by the Financial Services Legislation Amendment Act (FSLA Act) 2019 in March 2021.
The censure was made under section 75D(2)(f) of the FA Act.