The Financial Advisory and Intermediary Services Act (FAIS) is designed to create a professional code of conduct with specific outcomes and measurements which Financial Services Providers (FSPs) must comply with. Angelique Strumpher, Administration Manager at SilverBridge, takes a closer look.
All parties across the insurance value chain (Insurers, Underwriters, Intermediaries, Brokers, Consultants, Agents and Representatives) are accountable for the type of and suitability of financial products sold, customer information gathered in terms of “know your customer”, the needs analysis conducted, if the new policy constitutes a replacement policy, and the type of advice given.
According to Strumpher, a potential customer should be assured that interactions with their chosen product provider is done in an honest manner, they have not been taken advantage of, their financial interests and position have been considered, and their rights have been protected.
Non-compliance with FAIS can include fines up to one million rand and / or imprisonment of up to 10 (ten) years as well as the suspension of your FSP licence and debarment of a Representative.
“FAIS Fit & Proper competency requirements is needed across all financial sectors to ensure that customers get the best service and advice from industry experts. Accomplishing this has been a journey that started in 2002. It is continuously evolving based on customer experience and expectations from service providers, industry complaints, and FSCA findings in terms of irregularities. This constant evolution of FAIS Fit and Proper and TCF standards remains an expensive undertaking for any business within the financial services and insurance industry.”
Awareness of compliance has been a priority since the process began more than a decade ago. FSPs are all governed and guided by a host of Acts of which the FAIS Act and subsequent Board Notices overseen by the FSCA (Financial Sector Conduct Authority), previously the FSB (Financial Services Board) has been key. A great way of ensuring that you are always aligned to Fit & Proper requirements as well as all prescribed Acts is to subscribe to the FSCA’s electronic newsletter.“What FSPs struggle with most are ineffective, time-consuming manual processes to manage FAIS Fit & Proper, Product Specific Training, Competency requirements, and electronic record-keeping of data and documents in a central place where the information is easily accessible and retrievable. Technology is an enabler that assists in demonstrating that you as an FSP are operationally compliant with legislated regulatory requirements and you have ticked all the prescribed governance boxes,” she says.
An FSP is required to have their own solution that supports all aspects of FAIS Fit & Proper as per Board Notice 194 of 2017. The adoption of a robust software solution can assist with effective automated and digital management of this end to end process as agile and cost effectively as possible. Learn more about our FAISapp by visiting www.silverbridge.co.za.
SilverBridge has over 20 years’ experience as a leading provider of insurance software solutions in the African financial services industry. Our footprint extends to 14 African countries. SilverBridge has introduced an enhanced service offering allowing financial services companies the opportunity to respond quickly to changing markets. With customers throughout Africa, SilverBridge has the knowledge, experience, and technology to help its clients do better business.