Financial advice

Taking responsibility for the advice we give you
What is advice?
Who may give advice?
How does FAIS relate to Sanlam's strategy of trusted advice?
What does fit and proper mean?
Documentation and record keeping

Taking responsibility for the advice we give you

Sanlam takes responsibility for the financial advisory and intermediary services rendered to you by our representatives who are qualified and competent to do just that.

What is advice?

FAIS entitles you to appropriate advice on financial products based on relevant facts, your financial circumstances and your needs. The quality of the advice given is based on the relevance and extent of information provided by you, the client.

Advice, in terms of FAIS, is any recommendation, guidance or proposal of a financial nature to any client or group of clients in respect of:

• The purchase of, and investment in, a financial product
• The conclusion of any other transaction (including a loan or cession) with the aim of accepting responsibility for it, or the acquisition of any right or benefit in such a product
• The amendment of the terms and conditions of a financial product
• The replacement or termination of such a product
• The cancellation of the purchase of/investment in such a product.

Advice excludes:

• Analysing or reporting on a financial product without making any recommendation or proposal or without giving guidance. 
• Describing the procedure to enter into a transaction in respect of a financial product
• Answering routine administrative questions
• Describing a financial product
• Objective information about a financial product
• Displaying or distributing promotional material
• Information supplied by the board, management or the trustees of a pension fund or medical scheme regarding benefits enjoyed by such members.

Who may give advice?

The following persons or bodies may give financial advice to you:

• A licensed FSP – e.g. Sanlam or an independent broker;
  Duly authorised representatives of a FSP – e.g. Sanlam's financial advisers
• Other employees of a FSP who, in terms of their conditions of employment, render financial services to clients – e.g. Sanlam's legal consultants, advisers.

How does FAIS relate to Sanlam's strategy of trusted advice?

The term trusted advice implies that Sanlam's clients must be able to regard the advice as:

• Reliable
• In their interests
• Well-researched and professional.

FAIS supports the objectives of trusted advice. These objectives include protecting clients using financial services and products by:

• Ensuring clients make informed decisions
• Supplying an effective complaints resolution process
• Ensuring intermediaries are competent and skilled
• Promoting a positive image of the industry
• Protecting the adviser.

Sanlam supports a strategy of trusted advice.  And trusted advice is exactly what FAIS provides for.  Yet Sanlam's adherence to trusted advice is driven by its philosophy of good business practices and not solely by complying with legislation. It is therefore associated with good business practice, i.e. with Sanlam's philosophy of trusted advice.

What does fit and proper mean?

The term fit and proper is a collective term for all the personal characteristics, academic qualifications, experience and the operational ability that all FSPs, representatives and key individuals must possess to be able to render financial services.

The fit and proper requirements are contained in subordinate legislation in terms of FAIS. All key individuals and representatives must comply with the fit and proper requirements.

The requirements for fit and proper are:

• Honesty and integrity: Some specific factors include, but are not limited to, civil or criminal judgement, adverse findings, penalties or disqualification by recognised industry or regulatory bodies. In most cases the Registrar will consider the last 5 years.
• Competence (combination of experience and qualifications): FAIS does not mean everyone is obliged to write exams - minimum experience and qualifications for the fit and proper requirements have been established in terms of the provisions of FAIS.
• Operational ability: Key individuals and representatives must, for example, have a fixed business address, access to communication facilities and record retention facilities.  They must also have appropriate money-laundering controls in place.
• Solvency (financial soundness): A FSP may not be  unrehabilitated insolvent or under liquidation or provisional liquidation. Insofar as key individuals and representatives are concerned, FAIS is not prescriptive regarding financial soundness, however, Sanlam has its own internal rules in this regard.

Documentation and record keeping

Sanlam is responsible for keeping records for a period of 5 years after termination of the contract regarding the following:

• Verbal and written communication relating to financial services rendered
• Client data and information
• All advice given to clients, including a summary of all the information on which the advice is based, products considered and solutions recommended.

Client information and data is strictly confidential unless client consents to disclosure or it is required by any other law.