Trusted Adviser status defended after FoxPlan censure

Questions have been raised about the Financial Advice NZ Trusted Adviser status of three owners of FoxPlan after the company was censured by the FMA.

Tuesday, September 7th 2021, 6:08AM 8 Comments

by Matthew Martin

In late July, Wellington-based financial services firm FoxPlan was publically censured by the Financial Markets Authority (FMA) after five of its representatives were found to be offering services they were not permitted to give.

The FMA found one of FoxPlan’s Auckland-based nominated representatives had wrongly provided an investment planning service to some clients and that four other FoxPlan representatives incorrectly informed clients they were an AFA or financial planner.

The FMA stopped short of taking court action against the firm saying an official public censure and remedial action would be an appropriate penalty.

Three of FoxPlan's owners - John and Sally Killick and Warwick Walker, have trusted adviser status with Financial Advice NZ.

Good Returns readers commented on the original article asking whether their Trusted Adviser designations were still valid.

However, while Financial Advice NZ chief executive Katrina Shanks says she won't comment specifically about the FMA's ruling, she says all members are held to the same professional standards regardless of their Trusted Adviser status.

"The Financial Advice NZ Trusted Adviser mark indicates that an adviser’s level of qualification, experience, and focus on ethics has been recognised by us, the professional body for financial advisers," Shanks said in a statement.

"The Trusted Adviser mark is only eligible to individual financial advisers and not entities."

Financial Advice NZ Trusted Advisers have met the following criteria:

- a qualification in Financial Services (Level 5 or higher)
- providing regulated financial advice to retail clients for at least the last three years
- committed to a professional development plan and 20 hours of CPD every year
- attends the Financial Advice NZ three-hour Professional Ethics workshop at least every three years
- be protected by professional indemnity insurance as expected by a professional

Shanks says Financial Advice NZ has a robust disciplinary process that would deal with any member who was convicted of fraud, serious financial crime or other serious issues.

"The purpose of the disciplinary process is to reinforce Financial Advice NZ’s commitment to high ethical standards and engender public confidence.

"We hold all members to the same standard of ethics, practice standards and rules of conduct, regardless of whether they have the Trusted Adviser mark or not."

The FMA says FoxPlan has established and implemented an action plan to address the issues identified and that "once a FoxPlan adviser engages a client and advice is likely to be given, the adviser must disclose FoxPlan’s reliability history to the client, which would include the public censure".

Reliability events have a prescribed disclosure period of five years but are not legally required to be made publicly available on a financial advice provider’s website, but do need to be disclosed during the advice process.

FoxPlan has disclosed the censure on its website but attempts to contact FoxPlan about the issue have not been successful.

Tags: Financial Advice New Zealand financial advisers Financial Advisers Act FMA FoxPlan Katrina Shanks Trusted Adviser

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Comments from our readers

On 7 September 2021 at 8:23 am John Milner said:
I think we can end the witch hunt now. The FoxPlan directors failed in certain governance areas and have now put an acceptable remedy in place. This is no reflection of individual adviser competency or values. Possibly naive if anything.
On 7 September 2021 at 9:28 am JPHale said:
@John, I don't think this is about Foxplan, that's clearly been addressed.

It is more about the trusted adviser mark.

Can this situation still be considered a trusted situation under the trusted adviser mark with the extent of the conduct that was found?

That is more the question for us as an industry because it is the behaviour of everyone that reflects on this mark and those that use it.
On 7 September 2021 at 11:21 am Pragmatic said:
I'd love to hear from those who have attained and continue to preserve their 'trusted advisor' designation, and how they feel
On 7 September 2021 at 11:37 am smitty said:
Sadly I have to agree. It is not a witch hunt, but it is a timely case which could reinforce to the rest of us that carry this mark, that it means something. From reading the article it seems that provided you attend the Ethics workshops (and the other items are met), then you could have dubious morals and still retain the mark. FANZ had the chance to use this case as an example to extol the virtues of the mark, and what it means to advisers that hold it. Not even a warning from FANZ to the Directors individually
On 7 September 2021 at 1:26 pm gavin austin adviser business compliance said:
A question to all AFA's out there. How could a nomonated rep place business with a fundmanager or custdodian platform without an AFA involved?
On 7 September 2021 at 3:54 pm Matron said:
@John Milner, no not a witch hunt. I have known John, Sally and Warwick for 20+ years and do not question their integrity.

All this does is reinforce what I pointed out some time ago that the mark is nothing more than a rubber stamp exercise.
On 7 September 2021 at 4:54 pm John Milner said:
Can't agree with most comments so far. Had the comments been aimed at the nominated representatives, I could possibly understand that. But no, it's all about three company directors who, as far as I'm aware, did not provide services they were not permitted to give. They are guilty of however, as directors not having a reasonable process in place to ensure this does not happen.
I don't believe it's Financial Advice NZ's place to comment on governance issues when it comes to the Trusted Adviser mark.
On 7 September 2021 at 5:14 pm LNF said:
When FANZ people thought of the Trusted Adviser badge they should have taken a few deep breaths, gone for a walk around the block and with the obvious risk of exposure dropped the whole idea. Guaranteed to bite them in the rear anytime into the future

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