The Financial Advisory and Intermediary Services (FAIS) Act is a statement of law that affects the way a Financial Services Provider (FSP) conducts business, interacts with consumers, and guides the consumer in their daily dealings.

The Purpose of the FAIS Act is to:

  • protect consumers of financial products and services
  • regulate the selling and advice-giving activities of FSPs
  • ensure that consumers are provided with adequate information about the financial product they use and about the people and institutions who sell these financial products.

It does this by:

  • making sure all FSPs are registered
  • ensuring all service providers are adequately qualified
  • creating a code of conduct
  • defining duties in terms of compliance
  • establishing guidelines for record maintenance, accounting and audit requirements
  • providing mechanisms for enforcement and complaint procedures

Who does the FAIS affect?

The FAIS Act affects those that furnish financial advice, and/or render an intermediary service

As mentioned in a previous post, an intermediary service includes:

  • the storing of a financial product
  • the collection of premiums from clients on behalf of product suppliers
  • the receiving, submitting or processing of a client’s claim against a product supplier
  • buying, selling or dealing in (discretionary or non-discretionary basis) financial products
  • the administration, maintenance and servicing of any financial product

What rights are given to the consumer?

The consumer is provided a number of rights in terms of the FAIS Act, that include:

  • asking for a copy of the “Disclosure and Appointment Letter”
  • receiving trusted and appropriate advice and solutions based on affordability and suitability tests
  • being treated with honesty and integrity
  • expecting discipline and transparency from their FSP
  • being given the details about costs and how the amount will be paid
  • being told the commission charge
  • receiving a yearly report to keep you updated about your financial product
  • receiving a copy of the agreement within 30 days of signing the agreement, and
  • the ability to recourse

Knowing what the FAIS Act is and how it relates to you as an FSP or a consumer allows you to know your rights and what is expected of you.

If you need any further explanations or any financial advice, contact us or follow us on Facebook!


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