Filcare Services Limited (Filcare), a financial services provider primarily offering advice to migrant workers, has had its licence revoked by the Financial Markets Authority (FMA).
The decision affects approximately 1,800 retail clients, many of whom were from the Filipino community.
The FMA’s investigation uncovered several breaches of licence obligations by Filcare’s advisers, including failures to:
- Keep adequate records of advice given to clients
- Ensure clients understood the financial advice they received
- Exercise care, diligence, and skill when providing advice
- Provide adequate disclosures relating to advice
- Demonstrate that recommendations made to clients were suitable
FMA head of perimeter and response, Helena Lewis, said, “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.”
According to Lewis, clients were not provided with sufficient information about the nature and scope of the advice, which prevented them from making informed decisions about whether to seek, accept, or act on the recommendations.
She also added that. “Filcare advisers failed to demonstrate that the recommendations made to clients were suitable. As an example, for a vast majority of clients, the documentation on file lacked the requisite detail to clearly show how the selected levels of cover were determined and that the recommendation matched the risk tolerance, financial situation, and needs and goals of the client.”
There were also concerns over Filcare’s handling of insurance policy replacements. Advisers did not properly explain the risks involved in switching policies, such as the potential loss of existing benefits or the imposition of new exclusions due to changes in health. Clients were not given sufficient time or information to understand these implications before making decisions.
Lewis added that the FMA will continue to take action to ensure that all New Zealanders have access to fair, transparent, and efficient financial services, noting that “gaps remain” in the industry’s ability to prevent harm.
For complaints, Filcare clients are advised to communicate with Financial Services Complaints Limited, a free disputes resolution service for consumers.