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November 2025 | Newsletter No.3
Kia ora koutou
Welcome to the final Financial Advisers Update for the year!
As 2025 draws to a close, we’re reflecting on a year of meaningful engagement and progress across the financial advice sector. From the FAP Forums, speaking at industry conferences, webinars and seminars, to our participation at the FANZ Connect Tour, these events gave us valuable insights into what’s working well and where we can continue to support the industry in our role as the regulator.
We can see the sector is continuing to embed the financial advice regulatory framework; firms are finding efficiencies, and the time, energy and cost of compliance is smoothing out and feeling like business as usual.
One of our goals in regulating financial advice is to give you confidence to navigate the road ahead and innovate. Our Access to Advice review is an example of how we’re working to understand the challenges and opportunities for innovation, to enable an advice sector that is accessible and available for all consumers.
We would like to thank all those FAPs, advisers, industry bodies and community groups who have taken the time to either meet with us or submit their thoughts as part of the review. With the fieldwork now complete, we are turning our minds to drafting the final report. There’s still much to do, but we aim to launch the report in the first part of next year – watch this space.
In the meantime, we wish you a happy holiday season. We hope you take time to relax and recharge. A reminder that the FMA and other financial regulators minimise engagement events and consultation from mid-December to mid-January.
Thank you for engaging with us this year, to ensure that regulation is accessible and pragmatic. We look forward to continuing the journey together in 2026.
Romil Ghelani, FMA Head of Financial Advice
Another successful year of financial advice provider regulatory returns
The results are in for the second year of regulatory returns, for the period 1 July 2024 to 30 June 2025. We would like to thank financial advice providers for the time and effort they put into submitting their regulatory return, which is a compliance requirement. The data provides valuable insights into our financial advice industry. We will again be publishing a comprehensive industry snapshot next year, but for now, here are some preliminary statistics:
- 1,550 licensed financial advice providers submitted their regulatory return.
- The number of financial advisers grew by 8.4% to 9,184, up from 8,472 in 2024.
- Life and health insurance remain the most commonly advised financial products.
- In 2025, 49 financial advice providers provided a digital advice service and 164,841 retail clients received digital advice across these providers (that resulted in them acquiring a financial product). This is a 90% increase from last year.
- 97.5% of complaints received were settled within three months.
We ask FAPs to please ensure your regulatory return is accurate, complete, and submitted on time. We’d prefer not to chase advisers to fix incorrect data — getting it right the first time helps everyone.
Spotlight: Using research tools in the advice process
Research tools play a valuable role in helping advisers assess and compare financial products. These tools can offer insights into product performance, risk and suitability, to inform reasonable grounds for financial advice and support decision-making.
Some research tools provide ratings or rankings for products. While this can be helpful, it’s important to remember it should not replace professional judgement. Advisers should continue to apply their expertise and consider the unique circumstances, goals and needs of each client.
Over-reliance on automated outputs or product ratings can lead to advice that may not be appropriate or in the client’s best interests.
Research tools are most effective when used as part of a broader, holistic advice process. The appropriate use of such tools depends on the nature and scope of the advice being provided. By combining robust research with sound professional judgement, advisers can ensure they have reasonable grounds when giving financial advice – supporting better long-term outcomes and maintaining the integrity of the advice process.
FMA engagement, monitoring and enforcement highlights
These highlights are from our work across licensing, engagement, monitoring and enforcement activity for financial advice since 1 July 2025.
59 financial advice provider licences approved
These highlights are from our work across licensing, engagement, monitoring and enforcement activity for financial advice since 1 July 2025.
26 market engagements and meetings in the sector
This has included (but not limited to)
- 13 FAP Forums delivered across multiple cities and online – covering over 700 advisers
- New Zealand Home Loans (NZHL) Conference
- FMA Webinar on FAP Regulatory Returns
- FANZ Connect Tour, FMA joined and focussed on our Access to Advice across multiple cities, covering over 600 advisers
- ASB Wealth Connect Day.
- FSC Professional Advice Committee Lunch events
- IBANZ Webinar on Fire & General specific insights,
- Steadfast Conference
- FSCL Webinar on Financial Advice Complaints
- Independent Financial Advisers Association (IFAA)Conference
- Booster Adviser Conference
- MySolutions Webinar
If you’d like the FMA to speak at any of your adviser events or get togethers, please email Events@fma.govt.nz
16 monitoring engagements
In line with the FMA's regulatory priorities set out in our Financial Conduct Report, these financial advice monitoring visits have focused on:
- Conduct impacting consumers in vulnerable circumstances (particularly in relation to insurances and mortgages)
- Consumers and investors understanding fees, incentives, and commissions
- Effective protection of client assets
- Ensuring customers are treated fairly when things go wrong
Following reviews, we issue feedback letters so FAPs can address findings and take remedial steps. Where we identify harm or material breaches of licence obligations, we progress the matter to our Response and Enforcement function to consider a formal regulatory response.
109 enquiries
We received and responded to 109 enquiries from individuals and organisations. Of these, 53 related to FAP regulatory returns, while the rest covered topics such as adviser competency, product replacement business, and client money and property services.
42 misconduct reports regarding a financial advice provider or a financial adviser lodged and assessed
Notable themes include:
- Unsolicited contact (cold-calling)
- Concerns around misleading sales promotions
- Misrepresentation of insurance policy coverage (including exclusions)
- Allegations of unethical conduct
- Misleading or incorrect disclosures
Not all notifications result in an investigation or formal regulatory action. Depending on the circumstances, our response may involve reviewing the entity’s risk profile, conducting desk-based or onsite reviews, making further enquiries, or engaging informally with the entity.
2 administrative actions/civil/criminal proceedings regarding financial advice, since 1 July
Spotlight: Disrupting scams
We are warning advisers to be vigilant, as scammers are increasingly using Facebook and Instagram to impersonate respected New Zealand financial commentators and business leaders, such as Brooke Roberts, Carmel Fisher, Frances Cook and Gareth Morgan.
Samantha McGuire, FMA’s Manager Regulatory Services, says these scams are highly convincing and exploit trust in well-known figures and businesses.
“Advisers play a critical role in helping clients spot red flags,” she said. “If a client asks you about an investment opportunity they discovered through social media, you may have an opportunity to stop them falling victim to this scam.”
How the scam works
Scammers create fake social media profiles and use deepfake videos of these well-known figures to run ads promoting ‘investment advice’ on WhatsApp groups. These groups, filled with fake success stories, lure victims into buying low-value shares in pump-and-dump schemes or using fraudulent investment platforms.
These chat groups connect to a ‘mentor’ or ‘coach’ who provides trading tips or investment recommendations. These groups often prime the members to participate in a pump and dump scam – through tempting legitimate trades leading to buying low-value listed shares, promising high returns. However, the scammers control large volumes of these shares. They coordinate victims’ investments to artificially inflate (or ‘pump’) the share price. They then sell (or ‘dump’) their shares at a profit. When the share price collapses, victims are left with significant losses.
What advisers should do
Educate clients: Warn them about deepfake ads, investment chat groups, pump and dump schemes and risk of further scams such as recovery scams or the next ‘investment’ opportunity to recover losses.
Encourage due diligence: Encourage clients to verify any investment opportunity through trusted channels.
Scan for misuse of your brand / image: As an adviser your brand and likeness are valuable – we recommend you regularly scan for how these are used on the internet.
Report scams: If you or your clients encounter these ads, report them to the platform and the FMA immediately.
Louise Unger, FMA Executive Director for Response and Enforcement
Fraudulent conduct leads to licence cancellation
The FMA has taken strong enforcement action against a financial adviser who submitted false insurance applications to earn commissions. Les Vela Limited (trading as Wise Insurance) has had its financial advice provider licence cancelled, and its sole director and adviser, Le Zhou (also known as Eric), has been de-registered from the Financial Service Providers Register and prevented from re-registering for five years.
An investigation found 15 health and life insurance applications for 27 non-existent individuals, resulting in commissions of $260,937. This practice, known as ‘tombstoning’, is a serious breach of trust and professional standards.
Louise Unger, FMA Executive Director for Response and Enforcement, said under current weaker economic conditions we are seeing an increase in fraudulent activity by financial advisers, particularly in relation to insurances and mortgages.
“While these instances are the exception rather than the norm, the severity of the conduct makes this a priority for the FMA to address,” she said.
Police have charged Mr Zhou with forgery, reinforcing that misconduct can lead to criminal consequences.
What advisers need to know
Act with integrity: Fraudulent behaviour erodes public confidence and damages the reputation of the entire industry.
Follow the Code of Conduct: Ethical standards are not optional, they are essential for maintaining trust.
Report misconduct: If you suspect fraudulent conduct, notify the FMA and consider reporting the matter to the Police, particularly if you or your clients are victim to the alleged offending. Protecting the integrity of the sector benefits everyone.
The FMA’s Financial Conduct Report highlights that misleading or fraudulent activity is a regulatory priority. Advisers play a vital role in helping New Zealanders achieve financial security, and maintaining ethical standards is key to that.
Investment planning and financial advice – what you need to know
Designing an investment plan is more than just recommending products. It’s about understanding a client’s overall financial situation and helping them achieve their investment goals. Under the Financial Markets Conduct Act 2013, this is considered a form of financial advice and comes with all the usual financial advice obligations.
An investment plan may include recommendations on both financial advice products (like managed funds or shares) and non-financial advice products (such as real estate or precious metals).
Andy Crow, FMA Manager Financial Advice, explains: “If your advice is based on an analysis of the client’s overall financial situation, identifies investment goals, and includes at least one recommendation on how to realise 1 or more of those goals, you may be designing an investment plan.”
Only licensed financial advice providers, or those working under one, can legally offer this service, and they must meet the competency requirements set out in the Code of Professional Conduct for Financial Advice Services.
Warnings and alerts
We regularly publish warnings containing the names of businesses or individuals you should be wary of when investing.
Tools and resources
- Record keeping - https://www.fma.govt.nz/assets/Information-sheets/Record-keeping-self-assessment-tool.pdf
- Outsourcing arrangements - https://www.fma.govt.nz/assets/Information-sheets/Key-outsourcing-arrangements-self-assessment-tool.pdf
- Business continuity planning and cyber-resilience - https://www.fma.govt.nz/assets/Information-sheets/Developing-cyber-resilience-for-financial-advice-providers.pdf | https://www.fma.govt.nz/assets/Information-sheets/Self-assessment-tool-cyber-security-and-BCP.pdf
- Reporting cyber incidents - https://www.fma.govt.nz/assets/Guidance/Guidance-Notification-of-incidents-relating-to-the-operational-resilience-of-technology-systems.pdf
- Conflicts of interest - https://www.fma.govt.nz/assets/Information-sheets/Customer-care-managing-conflicts-of-interest-self-assessment-tool.pdf
- Vulnerable customers - https://www.fma.govt.nz/assets/Reports/CustomerVulnerability-ourexpectationsforproviders.pdf
- FAP monitoring - https://www.fma.govt.nz/assets/Information-sheets/Monitoring-of-licensed-Financial-Advice-Providers-information-sheet.pdf
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