The Financial Markets Authority has cancelled a financial advice provider's transitional licence - the first time it has taken such an action against a provider.
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Wisdom House Investment Partners lost its licence after its sole financial adviser engaged in serious misconduct at his previous employer.
"A licence cancellation is a strong regulatory response and we decided it was necessary in this case to send a strong message of deterrence," FMA director of supervision James Greig said.
"Trust in the financial advice sector is imperative and any misconduct that undermines that must be held to account."
The FMA said Yuen Pok (Paul) Loo established Wisdom House after his contract was terminated by Wellington-based financial services firm FoxPlan.
FoxPlan had been censured by the FMA in July 2021 because, among other breaches, one if its nominated representatives, Loo, provided services he was not permitted to give.
"Loo's misconduct at FoxPlan also included telling his clients that he was an authorised financial adviser when he was not, and invoicing clients for advice using altered FoxPlan invoices so that FoxPlan's clients would pay him directly - resulting in him misappropriating $36,029.98 from FoxPlan between 4 July 2018 and 4 November 2020," the FMA said in a statement.
In addition, it said Loo wrote investment plans for clients that had not been approved or signed off by the firm.
The regulator said Loo had subsequently returned the misappropriated funds to FoxPlan and the FMA was not aware that any clients suffered a financial loss.
As a result of Loo's misconduct and the FMA's enquiries, the FMA said it was satisfied that Wisdom House's transitional financial advice provider licence should be cancelled.
"The FMA determined that Mr Loo did not adequately address the regulator's concerns and is not a fit and proper person to hold the position of director or senior manager due to the serious nature of his misconduct.
"In addition, the FMA concluded that Wisdom House is likely to contravene its licensee obligations in the future because Mr Loo is the sole director and adviser."