The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – has cancelled the financial advice provider (FAP) licence of Christchurch-based Integrity Advisers Insurance Limited following findings of serious breaches.
Integrity provided financial advice to about 500 retail clients, many from the Filipino community. The company was owned and directed by Yuriy Bazhak, who also served as its financial adviser.
According to the FMA’s investigation, Integrity failed to meet its legal obligations as a licensed financial services provider.
The authority found the company:
These breaches relate to clients who sought to cancel their insurance policies between September 2022 and June 2023.
The FMA determined that Integrity pressured clients into keeping their insurance policies by sending them invoices, which gave only seven days to reinstate the policies or pay a fee. These fees were often equal to the commissions Integrity would have lost upon the policy cancellations and exceeded what was allowed under the company’s fee policy.
Integrity further misled clients by suggesting that failure to pay could result in a report to Immigration New Zealand, potentially affecting their visa status. In one case, Integrity falsely informed a client that a report had already been made, though the FMA found no reports were actually submitted.
The FMA also found that Integrity attempted to mislead the regulator by altering an invoice before submitting it during the investigation.
Integrity allegedly denied committing any serious violations, attributing invoicing errors to either oversight or lack of significance.
It also rejected the claims that it had intentionally misled clients or the FMA.
Peter Taylor, the FMA’s director of specialist supervision and response, said the decision to cancel Integrity’s licence was a response to serious misconduct.
“Mr Bazhak not only risked causing serious harm to his clients but preyed on their vulnerability through the threat of involving Immigration New Zealand,” he said, adding that cancelling the company’s licence is one of the strongest actions the FMA can take, which also serves as a clear warning that such behaviour will not be tolerated.
The FMA said clients of Integrity will be contacted by their new licensed financial adviser or insurer to ensure their ongoing needs are addressed.
Those who believe they were negatively affected can file a complaint with Financial Services Complaints Limited (FSCL), a free dispute resolution service.
The FMA has advised affected clients to either contact FSCL or their new financial adviser for assistance.
Separately, the FMA has laid criminal charges against a former financial adviser, who is currently under interim name suppression.
The adviser faces two charges of theft by a person in a special relationship, involving allegations of misappropriating approximately $1.7 million from two groups of clients between 2016 and 2022.
The adviser is alleged to have promised to invest the funds but instead used them for personal expenses.
