Following on from our blog about the Financial Services Board (they changed their name to the Financial Sector Conduct Authority, FSCA, on the 1st of April) earlier this year, I wanted to elaborate on what I meant by an ‘authorised financial services provider’.
What is a Financial Service Provider?
A Financial Service Provider (FSP) is a business offering financial advice and/or intermediary services (such as brokerages, insurance companies etc), and is made up of
- Key individuals, these people are responsible for the FSP and all the representatives who work for the FSP. They are also the people who have to report to the regulator and who the regulator will hold responsible for any actions against the FSP; and
- Representatives, these are the people who will give advice on financial services to prospective policyholders and will conclude all the necessary intermediary services with regards to products selected.
In order to operate as an authorised FSP in South Africa, a business entity or individual must be issued with a licence. Without this licence, they cannot operate as a FSP. Applying to be an FSP is not a simple application, it is arduous and there are many criteria that need to be in place.
Applying for a licence
Briefly, the process of applying for a FSP licence involves submitting an application to the registrar of the Financial Sector Conduct Authority. In order to become authorised, the entity would need to meet certain licensing requirements and has to comply with a code of conduct before obtaining their licenses.
The entity would also need to adhere to Fit and Proper status, which would include financial soundness, as set out by the Financial Advisory and Intermediate Services Act, before they are allowed to give advice on the various categories of financial products and obligations.
When applying to become a Financial Service Provider, the individual/business is evaluated under the following criteria:
- Personal character qualities of honesty and integrity
- Competence including experience, qualifications and knowledge
- Operational ability
- Financial soundness (of the business)
- Continuous professional development
We at Real People Assurance, are proud to be have undergone these evaluations and are licensed as an authorised financial service provider with the FSCA.
So, whether you need the simplest or most complex of financial advice, approaching an authorised financial service provider, such as Real People Assurance, who is licenced with, and has been approved by, the FSCA means that you are protected and your needs will be met efficiently and with the utmost discretion and sensitivity.