A good week for advisers - except one

Why? The Financial Markets Authority released its first financial advice provider (FAP) monitoring report.

It’s just over a year since the new advice regime came into effect and during that time (and some of the transitional licencing period) the FMA has made 60 monitoring visits.

These range from big FAPs like NZ Financial Services Group through to one man bands.

To hear that regulator is “encouraged” by what it found is indeed good news.

Of course it tempered things with a warning.

What was interesting in the report is the lack of specificity around what it found. Not much was quantified and there were lots of comments like “we found some instances”.

We did ask the FMA if under its monitoring visits it had found anything which would lead it to refer an adviser to the rather dormant Financial Advice Disciplinary Committee (FADC).
(FADC was set up at the start of the previous financial adviser regime in 2010 and frankly has had little to do over the past 14 years. Its up to case number 10 and that was in 2020 with a decision early 2021).

It seemed the answer was no.

Interestingly that last case was very much around record keeping and that is a main area of concern in the FMA's FAP report.

We also asked about whether the monitoring visits unearthed issues with the vexed issue of life insurance policy replacements.

But for one adviser it wasn't a good week. Late on Friday the FMA cancelled the FAP licence of StockFox. It said the sole director and adviser, David McEwen "is not a fit and proper person" and "Stockfox is not capable of effectively performing a financial service."

McEwen, who was a journalist at The Dominion in the 1990s - as I was too - wasn't a traditional financial adviser. He focussed on shares and trading with StockFox developing a trading app which gave investors tips. Essentially it appears to have been built around lots of short term trades.