The Financial Markets Authority (FMA) has censured Go Financial Solutions for failing to comply with its obligations as a licensed financial advice provider (FAP). 

Go Financial Solutions is based in Christchurch and provides advice on health, life and business insurance and mortgage lending. Its clientele is primarily the Filipino community, including non-residents on working visas. 

FMA says it found a number of breaches during a monitoring review of the business earlier this year. 

The regulator found the business had inadequate record keeping in relation to advice given to its clients and failed to ensure its clients understood the financial advice they received. 

Go Financial Solutions also failed to gather sufficient information about a client’s circumstances and was unable to demonstrate that recommendations made to clients were suitable. 

It also failed to exercise care, diligence and skill when providing financial advice to its clients. 

“In particular, the FMA observed instances where advisers failed to make reasonable enquiries about or take into consideration clients’ medical circumstances when advising clients to acquire a new policy or replace their existing life policy,” the regulator said. 

“Further, the FMA observed instances where a more detailed rationale was required than was given to support the recommendation made by advisers to clients to sign up with a particular provider, or to switch providers. 

“In the absence of this rationale, the FMA considered Go Financial Solutions failed to assess or review recommendations to a level that provided a reasonable basis for the recommendation.” 

FMA says the failures were a breach of the obligations a licenced FAP must abide by under the Financial Markets Conduct Act 2013. 

“These failures were serious and had the potential to cause harm, particularly for clients with vulnerable characteristics like English as a second language,” Director Specialist Supervision and Response Peter Taylor said. 

“Clients are entitled to trust their financial adviser and its conduct breached that trust and could erode the public’s confidence in financial advice providers.” 

The regulator says the business is required to submit an action plan to outline the steps it will take to remedy the breaches and to ensure it does not breach its licence obligations in the future. 

“The FMA acknowledges Go Financial Solutions’ cooperation to date, and its efforts to remedy the breaches. The FMA will monitor Go Financial Solutions’ compliance and completion of the action plan.”