Filcare Services Limited has had its Financial Advice Provider (FAP) licence cancelled by New Zealand’s Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – following the company’s request and the regulator’s subsequent investigation into its practices.
The Auckland-based firm, which offered financial advice to an estimated 1,800 retail clients, many of whom were part of the Filipino migrant worker community, had its operations reviewed after the termination of its distribution agreements with Fidelity Life Assurance Company and AIA New Zealand.
The FMA’s inquiry found that Filcare fell short of several core obligations required under its FAP licence.
Helena Lewis, the FMA’s head of perimeter and response, said the firm’s advisers did not maintain sufficient records of the advice given or ensure clients were fully informed of their financial decisions.
“Filcare’s cancellation follows the termination of its distribution agreement with Fidelity Life Assurance Company Limited and AIA New Zealand Limited and our subsequent inquiry into its affairs,” she said.
The review indicated that clients often did not receive the necessary disclosures to understand the scope of advice provided. In many cases, there was inadequate evidence to show that advisers had matched their recommendations to the clients’ individual financial circumstances or risk profiles.
The investigation identified repeated instances where advice documentation lacked critical details – such as how cover levels were determined or whether advice was tailored to clients’ specific needs. These issues were particularly prevalent in cases involving insurance replacement advice.
In scenarios where clients were advised to switch insurance products, Filcare advisers often failed to assess whether the existing policy still met the client’s requirements.
They also did not document a comparison between the old and new products or the implications of making a change, including potential loss of benefits or new exclusions due to changes in the client’s health or employment.
Lewis noted that clients were not given enough time or information to consider the implications of switching policies.
“The FMA will continue to take action where appropriate to ensure that all New Zealanders have access to fair, transparent, and efficient financial services,” she said.
At the time of the FMA’s inquiry, Filcare employed two financial advisers, including its sole director.
The FMA found that the company did not implement effective controls to ensure its advisers met their legal duties.
The cancellation of Filcare’s licence underscores the regulator’s approach to ensuring financial advice is delivered in a manner that supports informed consumer decision-making.
Consumer support and complaints process
Clients of Filcare who have concerns about the advice they received can contact Financial Services Complaints Limited (FSCL), a free dispute resolution service.
The FMA has also encouraged clients to review their insurance arrangements with their current insurer or an independent adviser.
This enforcement action coincides with the recent publication of the FMA’s first Financial Conduct Report (FCR), which outlined the agency’s regulatory focus for the year ahead.
The report identified key conduct risks and supervisory priorities across the financial sector, including insurance, banking, and investment advice.
FMA chief executive Samantha Barrass said the FCR aims to clarify regulatory expectations for financial institutions.
“We are responding to the clear desire for transparency, certainty, and improved engagement with the sector by setting out our priorities and the drivers behind what we’re doing,” she said. “Importantly, our report provides context and reasoning for these priorities by outlining key conduct risks and opportunities on the FMA’s radar over the next 12 months and how we plan to address them.”
