The Financial Markets Authority (FMA) of New Zealand has cancelled Filcare Services Limited’s Financial Advice Provider licence, at its request.

Filcare held a full financial advice provider licence, providing financial advice to approximately 1,800 retail clients, many of whom were migrant workers from the Filipino community.

The FMA’s inquiry found that Filcare’s advisers had contravened its licence obligations by failing to:

• keep adequate records in relation to advice given to its clients,
• ensure its clients understood the financial advice they received,
• exercise care diligence and skill when providing financial advice to its clients,
• provide adequate disclosures relating to advice, and
• demonstrate that recommendations made to clients were suitable.

In cases of replacement advice, the FMA observed minimal evidence that the advisers had considered and reviewed:

• the existing product to see if it continues to meet the clients’ relevant circumstances,
• the new product recommended to the client,
• the potential benefits that may be lost, and
• any other significant consequences of the switch for the client.

At the time of FMA’s inquiry, Filcare engaged two financial advisers, one of which is also the sole director of Filcare. The FMA also found that Filcare failed to take reasonable steps to ensure that advisers complied with their duties.

Filcare’s clients can complain to Financial Services Complaints Limited – A Financial Ombudsman Services, which is a disputes resolution service that is free to consumers.