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Investment fund manager failed to monitor investment

Douglas and Melanie lived in the UK and had an adult son who had become a NZ resident. 

In 2018, they made enquiries about moving to NZ under Immigration New Zealand’s (INZ) Parent Retirement Resident visa category. One of the conditions of this visa category is that the applicant must retain NZD1 million in an “acceptable investment” in New Zealand for four years from the date of the investment. To be an acceptable investment, the funds must be invested in bonds, equities or property. Funds could be moved from one acceptable investment to another, however the transfer had to be completed within four weeks. This meant that funds could not be left in a cash account for more than four weeks. After the four years, the applicant could apply for permanent residence.

Douglas and Melanie engaged an immigration adviser, Sophie, to assist with their visa application. 

In 2019, they discussed making an investment with a New Zealand investment fund manager. The fund manager provided an investment proposal, and advised they would invest Douglas and Melanie’s funds in accordance with INZ’s investment criteria. 

In January 2020, Douglas and Melanie completed the transfer of funds to the fund manager, who invested the funds in bonds, equities and property. A cash account was also opened to facilitate the transfer of funds between acceptable investments.

In April 2020, INZ issued Douglas and Melanie with their visas. The visas were subject to a number of conditions, including the condition that two years after the investment was made, they must provide evidence to INZ that they were retaining an acceptable investment in New Zealand.

In March 2021, one of the bonds in Douglas and Melanie’s portfolio had matured and the proceeds were paid into the cash account. However, the funds were not reinvested and remained in the cash account.

In early 2022, Douglas and Melanie planned a three month trip to the UK and Europe beginning in August 2022 and had booked and paid for their flights and concert tickets.

In February 2022, Sophie contacted Douglas and Melanie to advise the two-year review period for the visa conditions was approaching, and asked for evidence that their funds had been maintained in an acceptable investment. Douglas and Melanie and the fund manager emailed Sophie confirming the funds had been maintained in an acceptable investment.

In June 2022, INZ carried out their review. They contacted Sophie to advise the bond that had matured in March 2021 did not appear to have been reinvested.

The fund manager immediately accepted responsibility for having failed to note the bond funds had remained as cash in Douglas and Melanie’s portfolio after the bond matured. They offered to explain the situation to INZ. They also immediately reinvested the bond.

Sophie provided INZ with a letter from the fund manager explaining the situation.

In July 2022, INZ advised Sophie that Douglas and Melanie had failed to meet the investment condition of their visas. This meant they may be liable for deportation. INZ said they would undertake a review and consider any mitigating circumstances.

Sophie asked INZ how long the review would take. INZ said the timeframe was generally three months, but that they could not give a firm timeframe. She asked INZ if there were any options for Douglas and Melanie as they had travel plans. INZ provided some options, but these were limited and Douglas and Melanie were uncomfortable about leaving NZ with their visa situation undecided.  They decided to cancel their trip as their current visas were no longer valid.

Over the following seven months, Sophie made regular contact with INZ about the review.

In March 2023, INZ advised Sophie that Douglas and Melanie’s liability for deportation had been cancelled, and that further visas would be granted as an exception to policy.

Once the visas were granted, Douglas and Melanie went on their trip. 

Douglas and Melanie complained to the fund manager that their failure to monitor their portfolio to ensure their funds remained in acceptable investments caused them significant financial loss and inconvenience. 

The investment company offered them $2,000 to resolve the complaint. This would cover the costs of cancelling their flights and concerts, and the loss of return on the bond while it remained uninvested for 15 months. 

Douglas and Melanie did not think the offer was sufficient because it did not take into account the increase in the cost of flights when they rebooked their trip, and the significant stress they experienced. They brought their complaint to FSCL.


Douglas and Melanie advised that the cost of their airfares increased by $6,300 when they rebooked their trip in 2023. Further, they did not consider the funds manager’s offer took sufficient account of the stress and anxiety they suffered from being liable for deportation and the uncertainty about when the issue would be resolved.

The fund manager considered they had made a reasonable offer. They did not think they were responsible for the increase in airfares or the time it took for INZ to carry out its two-year review and issue new visas. 


Our review focussed on what would be a reasonable offer to resolve the complaint.

We thought the fund manager’s offer of $2,000 did not take into account the undoubted stress and anxiety Douglas and Melanie suffered from being liable for deportation. While the fund manager thought it was unlikely they would be deported and the matter would be resolved eventually, we considered that Douglas and Melanie could not know what the eventual result would be. From their perspective, their lives had been put on hold, and they had no assurance about the ultimate outcome. 

In terms of the increase to airfares, there were a number of factors that led to an unprecedented rise in international airfares at the relevant time. We were not satisfied that the fund manager could be held entirely responsible for these costs. 

The fund manager considered the matter further, and increased their offer to $6,000.


After a discussion with FSCL, Douglas and Melanie decided to accept the fund manager’s offer. 

Insights for participants

This is an example of a case of a fund manager accepting responsibility for an error in a timely manner, and attempting to assist their customer to put matters right with a third party. However, the case may have been resolved earlier had the fund manager considered the situation from their customer’s perspective. We considered that being liable for deportation would cause considerable stress. Further, while we appreciated that the fund manager was not responsible for the time taken for the INZ visa review, it was foreseeable that a failure to monitor the portfolio to ensure that funds were retained in an acceptable investment to meet the immigration rules may take some time to sort out.