To ensure that you’re receiving the best possible financial advice, there’s the Financial Advisory and Intermediary Act (FAIS). The Act offers protection against financial poor advice.
This will assist in preventing scam operators selling “financial” products to consumers.
FAIS also regulates financial service providers and the representatives of financial service providers selling a wide range of financial products.
A financial service provider (FSP) is any person or organisation that provides financial advice or intermediary services, which includes selling of a financial product. Whether they’re an independent financial adviser, selling the products of many financial service companies, or they’re a representative who’s s employed by a company, as an agent.
The objective of registering an FSP is to ensure that the people who are providing the public with inappropriate advice or who are selling fraudulent financial products are kept out of the financial services industry.
Therefore in terms of the Act, anyone or any institution selling a financial product or giving financial advice for a fee or commission must meet certain minimum requirements. They must behave honourably, professionally and with due diligence; provide appropriate advice. Or be subject to face disciplinary procedures if they don’t adhere to the FAIS Act.
The legislation, however, doesn’t mean that people with ill-intent will not try to con you. You still have an obligation to protect yourself, and to ensure that the person or institution giving you advice or selling you a financial product is properly licensed and behaves according to the law.