What is a representative of the FSP (Financial Services Provider)?
This is the person who is registered and qualified to provide you with financial advice.
In terms of FAIS legislation: It means any person, including a person employed or mandated by the first mentioned definition, who renders a financial service to a client for or on behalf of a financial services provider, in terms of conditions of employment or any other mandate but excludes a person rendering clerical, technical, administrative, legal, accounting or other service in a subsidiary or subordinate capacity which service:
a. Does not require judgement on the part of the latter person, or
b. Does not lead a client to any specific transaction in respect of a financial product in response to general inquiries.
In a nutshell, if a person provides financial advice and such advice is such that a choice or decision is being recommended or will lead to a transaction involving a financial product, that person giving the advice must be a registered representative in terms of FAIS.
This means that only a registered representative of an insurance brokerage (itself registered with the FSB) may provide insurance advice to trustees of bodies corporate. It also means that an administrative person at an insurance broker may also not necessarily be able to provide any advice. Only specific representatives who are qualified, fit and proper in terms of FAIS and registered may dispense advice in this way.
The body corporate (trustees and managing agent) should take care to ensure that advice received comes from a qualified and certified person, and that such a person provides a record of the advice, preferably in writing.
Simply trusting a person when it one’s own personal finances or decisions is fine if you are happy with it but when it comes to financial advice in respect of large assets of other people, trustees should take much greater care in this regard. A managing agent or trustee is acting illegally when suggesting one product over another at a trustee meeting, despite his or hers best intentions. Advice must come from the financial advisor, either in person or in writing.
CLICK HERE for more detailed information on the subject of compliance.
Author: Mike Addison
Contact Addsure – The Leaders in Sectional Title Insurance – to get fit and proper advice from advisors who understand Sectional Title. Contact us in Johannesburg (011) 704-3858; Durban (031) 459-1795; Cape Town (021) 551-5069