Financial adviser warned over suspected deceptive behaviour but won't be named

A former financial adviser has received a warning from the Financial Markets Authority after he filled out and submitted forms on behalf of clients without their authority. Photo/Getty Images.

A former financial adviser has been warned over suspected misleading and deceptive behaviour but has escaped being named.

The Financial Markets Authority yesterday said it had warned an adviser after an investigation found he told clients to switch life insurers but did not provide them with any information about the new policy cost.

He then gave them a direct debit form to fill out and when they did not do so filled it out and submitted it himself without their authority.

The adviser also filled out and submitted a form declaring his clients good health without their permission.

But the FMA said it would not name the man who has since voluntarily de-registered as an adviser and lost his job.

"The FMA has completed its investigation and determined that the appropriate response that is proportionate to the misconduct in this case is to issue a warning to the individual."

The FMA said no threat was posed to future or existing clients from the man and it was satisfied the incident was a one-off and of a low monetary value.

"The individual's employer has reviewed all relevant files and has identified no other misconduct."

It found the financial adviser made no financial gain from the alleged conduct and the clients suffered no monetary loss and remain insured.

"All of these factors and that the individual co-operated with the FMA during its investigation, led to the decision not to name the individual concerned."

While the FMA was satisfied in this case that the individual considered that the product was appropriate for his clients, by completing and submitting the relevant forms without authority his conduct was nonetheless unacceptable.

FMA

The regulator has been taking a closer look at life insurance advisers and in June it released a report raising concerns about a group of around 200 advisers which had high levels of replacement business.

The report which analysed the sales data of New Zealand's 12 main life insurers, found some advisers were likely to have be acting in their own interests by replacing insurance policies to boost commissions or get free overseas trips.