Shuttered FAP owes around $8 million

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The liquidator of deregistered insurance advice firm Foundation Advice Ltd, estimates it owes around $8 million.

Friday, December 8th 2023, 7:23AM 2 Comments

by Andrea Malcolm

Auckland-based Foundation Advice, whose website is still live, offered advice on life and health insurance.

On 26 Oct it was put into liquidation by the Auckland High Court following an application by Inland Revenue for unpaid GST. The Official Assignee was appointed as liquidator.

In the first liquidator’s report filed on the Companies Office website, the Official Assignee says Foundation Advice had an insurance book of business agreements with several insurance companies, entitling it to receive commissions for various insurance products.

The liquidator will contact these companies to assess the value of the FAP’s book of business to see whether it can be sold for the benefit of creditors.

Liabilities listed in the report are employee claims of $1.1 million, unsecured creditor claims of $6 million and the IRD claim of $1 million.

A progress report will be completed in the next six months.

The Financial Markets Authority (FMA) gave Foundation Advice a transitional FAP licence in March 2021 followed by a full licence in October 2022.

But it was deregistered from the financial services provider register on 6 Nov for not being a member of an approved dispute resolution scheme under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

Following the high court’s appointment of a liquidator, the FMA exercised its powers under the Financial Markets Conduct Act 2013 to cancel

Foundation Advice’s FAP licence from 17 Nov 2023, and encouraged its clients to contact relevant product providers to review their arrangements.

Tags: FMA

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