FMA clarifies Wisdom House FAP cancellation decision
The Financial Markets Authority (FMA) has added some details around its decision to cancel the transitional financial advice provider (FAP) licence of Wisdom House Investment Partners.
Friday, December 17th 2021, 6:00AM
by Matthew Martin
It was the first time the FMA had cancelled a FAP licence and resulted from an investigation into Wellington-based financial services firm FoxPlan, which was censured by the FMA in July 2021 because, among other breaches, one of its nominated representatives provided services he was not permitted to give.
The nominated representative was Yuen Pok (Paul) Loo, who established Wisdom House Investment Partners after his contract was terminated by FoxPlan for serious misconduct.
Loo’s misconduct included telling his clients he was an authorised financial adviser when he was not, and invoicing clients for advice using altered invoices resulting in him misappropriating $36,029 from FoxPlan between 4 July 2018 and 4 November 2020.
Additionally, Loo wrote investment plans for clients that had not been approved or signed off by the firm.
According to a statement, the FMA says it was first made aware of the possibility that Loo engaged in misconduct in late 2020 as part of its monitoring review of FoxPlan.
"Wisdom House’s transitional licence was approved in January 2021 because it satisfied the criteria. At the time of issuing, we didn’t have enough evidence or information to be satisfied that Mr Loo had engaged in the misconduct.
"In accordance with the principles of natural justice and a robust process, we wanted to give Mr Loo the opportunity to explain himself," the FMA says.
Following submissions from Loo, the FMA decided to cancel Wisdom House’s transitional FAP licence in November 2021 and was made effective on December 10.
"If we didn’t grant the transitional licence, Mr Loo wouldn’t have been able to earn a living as a financial adviser from March 2021 due to the new financial advice regime."
The FMA says it was still able to continue its investigation during this period.
The FMA determined that Loo, the sole owner and adviser at Wisdom House, did not adequately address its concerns and was not a fit and proper person to hold the position of director or senior manager due to the serious nature of his misconduct.
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