FMA censures financial advice group

The Financial Markets Authority (FMA) has censured Auckland-based financial services firm deVere New Zealand for failing to comply with obligations under its Financial Advice Provider (FAP) licence.

DeVere provides advice on insurance, investments, and retirement planning, including KiwiSaver and UK pension transfers. The censure relates to issues concerning deVere’s conduct while advising clients on UK pension transfers.

Following a complaint about deVere’s conduct, which has now been resolved, the FMA conducted a review of its client files. The review found deVere:

• Had inadequate record keeping in relation to advice given to its clients
• Was unable to demonstrate that the recommendations made to clients were suitable 
• Failed to ensure its clients understood the financial advice they received and any limitations of the advice
• Inappropriately limited the nature and scope of its advice and failed to clearly articulate those limitations to its clients
• Failed to exercise adequate care, diligence, and skill in providing advice to its clients.

In particular, the FMA found deVere’s advisers failed to adequately consider the client’s investing experience and financial product knowledge, their risk profile in their advice on pension transfers, and the investments they recommended to the client. Some of the advised investment products were complex in nature and higher risk.