Aurora pinged for misleading clients

The regulator says the group mislead existing and potential clients about KiwiSaver returns. It says the group "materially contravened two market services licensee obligations".
Aurora Financial – a financial advice provider – recommended Aurora KiwiSaver Scheme funds o clients or prospective clients during one-on-one advice sessions between September 2021 and May 2022. The Aurora funds did not launch until after the scheme was registered by the FMA in July 2021.

During the client sessions and in statements of advice, one-year and annualised returns figures were presented in connection with the Aurora funds. The figures were based on the historical returns of the underlying, third-party funds into which the Aurora funds would be invested, once the Aurora funds launched. The returns figures implied that the Aurora funds had an established history which they did not.

Fine print below the returns figures was not sufficiently clear, or prominent, for clients to understand the returns presented had not been achieved by the Aurora funds, but by the underlying funds. Additionally, Aurora Financial did not update, or replace, the returns figures with the actual returns produced by the Aurora funds once they had launched and short-term return data was available.

Aurora Financial stopped using the returns figures in May 2022.