Instead, he will be subject to a supervision plan he has agreed to by the Financial Markets Authority.

The authorised financial adviser appeared before the FADC yesterday and their judgement was released this afternoon.

Both the adviser’s name, and that of the QFE he worked for, have been suppressed.

The offending related to the adviser’s failure to keep the required records.  No clients had complained and there was no identified loss for any client, the FADC said.

The committee said the adviser had already suffered a financial penalty as a result of his QFE’s complaint.

“As a result of the complaint by the QFE, the QFE terminated its relationship with the AFA. This appears to have caused the loss of an anticipated opportunity for the AFA to sell the adviser business to the QFE. It was said to be worth in excess of $200,000. In addition, because of the termination the AFA has not been in employment for a period approaching nine months.”

The committee said the importance of proper record keeping could not be minimised because of the influence it could have in determining whether an AFA had an up-to-date understanding of a client’s financial situations, needs, goals and risk tolerance.

“These factors are vital to determining what steps an AFA has taken to ensure that financial services provided to a client are suitable for that client.”

The FMA’s legal counsel had suggested that in addition to the supervision plan, the adviser be fined $1000 for each admitted breach of the code.

But the FADC said it was not convinced that there was merit in an additional penalty. “The AFA has been thoroughly co-operative in the investigation and in accepting the proposed supervision. In light of all the relevant factors, we are not convinced there is efficacy in imposing any additional penalty. It would be only tokenism and is not required.”

Despite the suppression orders, the adviser will have to make the breaches clear in his PDS statements for the next five years.