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Category:
South Africa
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Insurance
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Resources /
Financial
Services Board
Financial
Services Board (FSB)
Protecting
your rights
The Financial Advisory and Intermediary Services
(FAIS) Act
 Your money is precious to you, and deciding who should advise you
on your investments is not a decision to be taken lightly. To
protect your rights, the Ministry of Finance, as far back as 1993,
investigated mechanisms for regulating conduct within the
financial services industry.
The main purpose was to:
Provide
consumer protection in terms of financial products; and
enhance the
integrity of the South African financial services industry.
This resulted in the
Financial Advisory and Intermediary Services (FAIS) Act which was
enacted in November 2002. We are committed to serving you, our
customers, within and beyond the specifications of the law.
Aim of the Act
- The primary
aim of the Act is to protect you against improper conduct by
financial service providers (FSPs).
- The Act makes
provision for FSPs to be licensed and authorised through a
government-appointed regulatory body, the Financial Services
Board (FSB). The FSB will provide you with the right of
recourse should the FSP not comply with the Act.
- The FSB
regulates members of the industry in the way they provide
advice, as well as related intermediary services such as
processing your insurance claims, in terms of certain
financial products as defined by the Act.
- The FSB
regulates members of the industry in the way they provide
advice, as well as related intermediary services such as
processing your insurance claims, in terms of certain
financial products as defined by the Act.
- The FSP's
licence must be prominently displayed.
- The Act allows
for an FSP to employ a representative under contract, to
render services or give advice relating to a financial
product. Representatives are not required to be licensed
individually, but because they are employed by a licensed FSP,
they are required to comply with certain "fit and
proper" requirements.
FSPs are managed by
key individuals who bring both technical competence in a
particular financial product category, as well as managerial
skills to their organisations.
- FSPs with
multiple key individuals or representatives are required to
appoint a compliance officer who has a set of responsibilities
in terms of the Act to ensure that their organisations adhere
to certain basic principles when rendering services in respect
of financial products. These principles contain provisions
relating to the following basic categories of information:
- Adequate
disclosure of relevant material information to you
- Disclosure of
actual and potential own interests to you
- Adequate and
appropriate record keeping
- Avoidance of
fraudulent and misleading advertising, canvassing and
marketing
- Proper
safekeeping, separation and protection of your funds and
transaction documents
- Suitable and
adequate guarantees, professional indemnity or fidelity
insurance cover.
Fit and proper
requirements
The Act requires that competent and qualified persons render
services and give advice (fit and proper requirements). Fit and
Proper requirements of a representative include:
- Honesty and
integrity
- Competence and
operational ability
- Sound
financial base.
The Act entitles you
to sound financial advice, services and products that best suit
your needs. Your financial adviser, therefore, needs to be
trustworthy and knowledgeable and understand your needs.
The Act entitles you to complain about any inappropriate advice
given, or service rendered, in relation to a particular financial
product. While we would request the opportunity to resolve any
issues raised internally, the FAIS Ombud has been created by the
FSB to handle all FAIS-related complaints in a way that is fast,
procedurally fair, informal and economical.
Financial services defined
"Advice" is defined in the Act as "guidance or
recommendations of a financial nature to a customer on a financial
product, irrespective of when it is furnished or the result of the
advice."
Anything other than advice is referred to as an "intermediary
service".
Financial products covered by the Act include:
- Investments
- Insurance
- Deposits
Loans
and credit agreements are excluded from the Act
Our responsibilities as a financial services provider
We have always done business according to the Codes of Conduct
which the FAIS Act now demands of FSPs. We pride ourselves in
exceeding the requirements set down, in many aspects.
Our management team comprises personnel who display honesty and
integrity and who have demonstrated competence in their fields.
The representatives we employ in our FSPs are selected along the
same criteria and are well placed to provide products and services
in compliance with the Act.
Our processes are designed to ensure that we comply, not only with
this Act, but with the many other legally or voluntarily imposed
regulations affecting the way in which we conduct business.
We have appointed a dedicated team to ensure, not only that we
comply with the regulations set down by the FSB, but who will
ensure you receive the best deal possible.
Our Customer Relations Centre has been effective for many years in
dealing with customer complaints, and has been recognised for its
team's ability to deal effectively with issues brought to its
attention. Those issues that are not satisfactorily resolved
internally may now be elevated to the FAIS Ombud under the
auspices of the FSB.
Any service provider who does not comply with any aspect of the
Act is open to prosecution, public declaration of their
undesirable practices and administrative penalties.
Our declaration
We will continue to try to act honestly and fairly, and with due
skill, care and diligence, in your best interest.
More information
More information on the Financial Advisory and Intermediary
Services (FAIS) Act may be obtained from the Financial Services
Board (FSB) on their toll free numbers 0800 110 443/0800 202 087,
or visit their website at www.fsb.co.za.
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