License obligations breached
The Financial Markets Authority (FMA) has censured Auckland-based financial services firm deVere New Zealand Limited for failing to comply with its Financial Advice Provider (FAP) licence obligations.
DeVere provides advice on insurance, investments, and retirement planning, including KiwiSaver and UK pension transfers.
Inadequate practices and record keeping
The censure follows a complaint about deVere’s conduct in advising clients on UK pension transfers.
An FMA review found deVere had inadequate record-keeping and failed to demonstrate that their recommendations were suitable. Additionally, deVere failed to ensure clients understood the financial advice received and the associated limitations.
“FAPs have a duty to comply with the standards of ethical behaviour, conduct and client care as set out in the code of conduct,” said Peter Taylor (pictured above), FMA’s director of specialist supervision and response.
Taylor said that significant customer harm can occur if advice is not suitable, particularly concerning crucial retirement decisions.
DeVere admits failures, faces censure
DeVere accepted the findings, acknowledging a lack of proper records and the need for better documentation.
“DeVere’s conduct falls short of the standards we expect and had the potential to cause harm to the client's long-term future,” Taylor said.
While FMA recognised deVere’s steps to improve compliance and record-keeping practices, they considered a public censure necessary.
“Censures hold firms to account while serving as an important reminder of their obligations to their customers,” Taylor said.
FMA: Action plan and monitoring required
DeVere must submit an action plan to FMA detailing steps to remedy the breaches and prevent future occurrences.
FMA will monitor deVere’s compliance and the implementation of the action plan. FMA acknowledged deVere’s cooperation and efforts to meet its obligations fully.
Recently, FMA released a new information sheet aimed at assisting smaller firms in navigating the requirements for a Fair Conduct Programme (FCP) and obtaining a Financial Institution (CoFI) licence as well as produced a set of guides to help people understand the new climate-related disclosures (CRD) regime.
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