O9. Financial Advisory and Intermediary Services Act (FAIS)

The Financial Advisory and Intermediary Services Act, or the FAIS Act for short, exists to protect you, the consumer, from getting dodgy financial advice.

The FAIS Act says that anyone who provides financial advice should be registered with the Financial Sector Conduct Authority (FSCA). That means only registered financial advisors can give you advice about what insurance products (or any product that takes your money and does something with it, like an investment product) are right for your specific situation.

Purpose of the Act

“To regulate the rendering of certain financial advisory and intermediary services to clients; to repeal or amend certain laws, and to provide for matters incidental thereto.”

FAIS is legislation that impacts the financial services industry and aims to regulate the giving of advice and rendering of intermediary services to clients, as well as certain other issues. FAIS impacts most financial institutions, financial service providers their representatives (such as advisers, direct sellers) and other staff.

  • Protect the clients who use financial services and products.
  • Protect the financial services industry.
  • Protect intermediaries.
  • Determine the financial needs of the clients.
  • Provide appropriate advice to clients after having established the relevant facts.
  • Assist clients to make informed decisions.
  • Establish an effective complaints resolution procedure.
  • Ensure that intermediaries are competent.
  • Ensure that product providers and financial planners act with due care and diligence, and in the interests of the client.
  • Provides clients with trusted and appropriate advice and solutions.
  • Act with integrity, transparency and a culture of discipline when dealing with clients.
  • Receiving protection by means of appropriate and trusted advice, integrity and transparency.
  • Maintenance of high standards by product providers.
  • An effective complaints resolution mechanism.
  • Protection through the continued existence of the FSP.
  • Proper monitoring of advisers’ and consultants’ actions.
  • Record keeping of advice and communication.
  • Ensuring that advisers are competent.

Who must register with FAIS?

FAIS became effective on 30 September 2004. It is important to note that this date is the same for all financial institutions impacted by FAIS and that, from this date onwards, no FSP may operate without an FSP license.

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