INDEPENDENT BROKERS VERSUS SANLAM ADVISERS

SANLAM says a distinction needs to be made between independent brokers that sell its products and its own advisers.

“In the case of Mr N, he made use of the services of an independent broker, not a Sanlam adviser. The information below serves to clarify the distinction in terms of Sanlam’s duties and responsibilities.

“Sanlam contracts intermediaries to sell Sanlam’s products. Sanlam is responsible for the actions and omissions for such intermediaries in the course and scope of them exercising their functions under such a contract. For purposes of vicarious liability the courts consider such intermediaries as employees of Sanlam.

“In this instance the intermediary is an independent broker and not a Sanlam adviser. Independent brokers run their brokerages independently and must be registered by the Financial Sector Conduct Authority as an authorised financial services provider. They contract with various product providers to sell their products.

“These financial institutions have no jurisdiction over independent brokers and are also not considered vicariously liable for any advice and conduct of independent brokers.

“Sanlam therefore has no jurisdiction over the advice given and conduct of an independent broker. The client has the option to take the matter up with the broker directly. In the event that the matter cannot be resolved with the broker, the client is at liberty to lodge a complaint, in writing, with the office of the FAIS Ombudsman.”