Chapter 8: Investment advice

Question 1

Any recommendation, guidance or proposal of a financial nature furnished, by any means or medium, to any client or group of clients –

Answer 1

• in respect of the purchase of any financial product; or
• in respect of the investment in any financial product; or
• on the conclusion of any other transaction, including a loan or cession, aimed at the incurring of any liability or the acquisition of any right or benefit in respect of any financial product; or
• on the variation of any term or condition applying to a financial product; or
• on the replacement of any such product; or
• on the termination of any purchase of or investment in any such product,

Question 2

In terms of the Act, authorised Financial Services Providers, and their representatives, must follow the FAIS general code of conduct in which they are obliged to:

Answer 2

• Act honestly and fairly, and with due skill, care and diligence, in the interests of clients and the integrity of the financial services industry.
• Have and employ effectively the resources, procedures and appropriate technological systems for the proper performance of professional activities.
• Seek from clients appropriate and available information regarding their financial situations, financial product experience and objectives in connection with the financial service required.
• Act with circumspection and treat clients fairly in a situation of conflicting interests.
• Comply with all applicable statutory or common law requirements applicable to the conduct of business.