Staff who is­sue poli­cies should reg­is­ter un­der FAIS

Weekend Argus (Saturday Edition) - - MEDIA& MARKETING -

Banks may be con­tra­ven­ing the Fi­nan­cial Ad­vi­sory and In­ter­me­di­ary Ser­vices (FAIS) Act by not en­sur­ing that em­ploy­ees who is­sue per­sonal loans and sell life as­sur­ance to cover debt are reg­is­tered as rep­re­sen­ta­tives of fi­nan­cial ser­vices providers (FSPS).

Nedbank, which is reg­is­tered with the Fi­nan­cial Ser­vices Board (FSB) as an FSP, has told Per­sonal Fi­nance that per­sonal loans “are granted by bankers or per­sonal loan agents, who are not reg­is­tered un­der (a) FAIS li­cence to ad­vise on life as­sur­ance. Nedbank fi­nan­cial plan­ners (ad­vis­ers) are not in­volved in the grant­ing of per­sonal loans in the un­se­cured environment.”

Asked whether Nedbank was con­tra­ven­ing the FAIS Act, the bank replied that the Act was “not ap­pli­ca­ble, as bankers and per­sonal loan agents, who grant per­sonal loans, are not reg­is­tered un­der FAIS to pro­vide ad­vice”.

In re­sponse to Nedbank’s claims, Gerry An­der­son, the FSB’S deputy ex­ec­u­tive in charge of mar­ket con­duct says: “I have pe­rused the re­sponse re­ceived by you from Nedbank. It is in­cor­rect to state that an in­di­vid­ual who is in­volved in the sale of an in­sur­ance prod­uct of any na­ture (in­clud­ing a bank em­ployee) is not re­quired to be Fais-reg­is­tered. The pro­vi­sion or not of ad­vice in such cases is not the de­ter­min­ing fac­tor, as in­ter­me­di­ary ser­vices (the other leg of FAIS) may be in­volved.”

In a fol­low-up re­sponse, Nedbank says that “due to the fact that per­sonal loan con­sul­tants do not pro­vide ad­vice, and per­form cler­i­cal and ad­min­is­tra­tive ser­vices in a sub­or­di­nate ca­pac­ity which does not re­quire judg­ment on the part of con­sul­tants, the con­sul­tants are not con­sid­ered to be rep­re­sen­ta­tives in terms of FAIS, and ac­cord­ingly are not re­quired to be reg­is­tered.

“We are com­pli­ant with the re­quire­ments of FAIS and are in line with the un­se­cured lend­ing in­dus­try and our com­peti­tors.”

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