Advertise Here


IconAccounting & Tax
IconAppraisers & Valuers
IconArbitration Services
IconAssessors & Loss Adjusters
IconAssist and Lifestyle Benefits
IconAssociations & Institutes
IconBBBEE Consulting and Verification Agencies
IconBroker Acquisition Financing
IconBrokers for Brokers
IconBusiness Process Management
IconBusiness Process Outsourcing
IconCall Centre Outsourcing & Sales
IconCompany Secretarial Services
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconDebit Order Collection Facilities
IconDefensive Driver Training
IconEducation and Training
IconEmergency Medical Rescue
IconFire, Storm, Flood Damage Specialists
IconForensic Investigation Services
IconHuman Resources
IconIndustrial Cleaners
IconInformation Technology and Software Partners
IconInsurance Companies
IconLightning Damage & Surge Protection Specialists
IconNiche Insurance Products
IconOutbound Sales
IconOutsourcing Companies
IconPolicy Administration
IconPremium Financing
IconPublic Loss Adjustors
IconRating Agencies
IconReference Books & Material
IconRegulatory Authorities
IconRisk Finance
IconRisk Management
IconRisk Surveyors
IconSalvage Operators
IconSpecialized Claims Investigations & Assessing
IconSurveys and Research
IconTraining Courses & Workshops
IconUnderwriting Managers
IconVehicle Accident Management
IconVehicle and Household Risk Inspection Services
IconVehicle Tracking
IconWellness Programs
IconWholesale Brokers
  Subscribe To »

The principal nature of the duties of the Financial Services Intermediary











Michael Salant, Head of Legal
Southern Cross Risk Management (Pty) Ltd





Over the years, the financial services intermediary has been under significant public scrutiny.  He has been portrayed as greedy and unscrupulous. In certain adverts he has been reduced to a superfluous cost in the supply chain of insurance. And his role is often misunderstood to be a producer of the cheapest quotes.

This maligned perception is slowly beginning to dissipate but will only disappear when proficiency within the industry is the standard. Perhaps then, our critical role will be elevated to align with the value associated with other professionals employed as accountants, doctors and educators.

To reduce the incidents of dispute and to earn ourselves reputational enhancement we need to comply with our duties and obligations properly and professionally. This article aims to focus on certain core and overarching obligations in a nutshell.

The general duties of the intermediary can best be summarised in terms of Section 2 of the FAIS General Code of Conduct which states that:

A provider must at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and integrity of the financial services industry.

Prior to the promulgation of FAIS we were obligated to perform our functions in terms of the Common Law,  primarily as agents of our clients (as contractually prescribed) in a professional manner.  In broad terms we were to comply with the following factors:

  • Not to exceed our mandated authority;
  • To operate with the requisite skill and diligence;
  • To obey client’s lawful and reasonable instructions;
  • To carry out obligations with reasonable despatch; and
  • To keep the principal (ie the client) informed at all relevant times.

We furthermore were to ensure that during our relationship we were to adhere to the following

  • Put client’s needs first and avoid any conflict of interests;
  • Not make secret profits; and
  • Keep client’s money separate from our own.

Obligations were often insufficiently clarified and functions, often vague. Then came FAIS.

FAIS has introduced more certainty and has compelled us to act subject to uniform rules.  Its intention is not to simply replace our Common Law but to provide a codified, clear and fortified appreciation of expectations and obligations.  Where legislation does not conflict with the Common Law, the latter will prevail. So, do not discard pre-FAIS good practice but improve your services by performing constant assessments of compliance with FAIS.

So for those of us who have not yet done so a simple checklist including the following key directives form the Code of Conduct may be of assistance as an aid to be included on all files.

Supply of Information

When you render a financial service, make sure that representations made to a client:

  • Are factually correct
  • Are provided in plain language (cannot be misleading)
  • Avoid uncertainty
  • Are provided timeously (sufficient time for client to make an informed decision)
  • Take account of the factually established or reasonably assumed knowledge of the client
  • Are confirmed in writing on client’s request
  • Are in clear readable print size, spacing and format
  • Set out all fees and charges in monetary terms (if not reasonably pre- determinable, basis of calculation must be adequately described).


  • You should provide reasonable and appropriate general explanation of the nature and material terms of the relevant transaction to a client and make full and frank disclosure of any information that would reasonably be expected to enable the client to make informed decision
  • Whenever reasonable, provide client with any material contractual information, material illustrations, projections or forecasts
  • Provide concise details of any special terms
  • Fully inform a client in terms of the completion or submission of any transaction requirement that
    • It is the client’s responsibility to disclose all material facts accurately and properly;
    • If you complete or submit any transaction requirements on behalf of a client, the  client should be satisfied as to the accuracy and completeness of the details;
  •     Where a client elects:
    • to conclude a transaction that differs from that recommended by you;
    • not to follow the advice you furnished;
    • to receive more limited advice than you are able to provide
  • You should alert the client in writing, as soon a possible of the clear existence of any risk to the client, and to take particular care to consider whether any product selected is appropriate to the client’s needs, objectives and circumstances.

Incorporate the above into your practice consistently and you will professionalise your business.

Source: Southern Cross Risk Management (Pty) Ltd
« Back to previous page Print this page » |

Breaking News »

Interview with Bright Rock CEO, Schalk Malan about their ground-breaking temporary disability cover

In October 2019 Needs-matched life insurance provider, BrightRock, announced enhancements to their temporary expenses cover. Read More More recently Insurancegateway® Interviewed Schalk Malan to not only ...
Read More »


The Importance of an effective online campaign

As we enter the age of the fourth industrial revolution, a technological transformation driven by the internet, it seems almost unthinkable that the web would not be the preferred platform chosen by businesses ...
Read More »


Allianz and Embry-Riddle University aviation study: Safer skies but claims and risks grow

Fewer fatal accidents, but growing number of costly claims for the aviation industry and insurers from collisions, groundings and aircraft repairs Analysis of 50,000 aviation insurance claims shows collision/crash ...
Read More »


Allianz and Embry-Riddle Aeronautical University report: Flying has never been safer

Despite record numbers of passengers, 2017 and 2018 are among the three safest years of the aviation industry for fatal plane crashes Safety driven by design, technology and training improvements Strap yourself ...
Read More »


More News »


Healthcare »


Investment »


Life »


Retirement »

Advertise Here
Advertise Here

From The Glossary »


Loss Reserve – Incurred:

A provision for losses resulting from accidents or but not reported (IBNR) occurrences that have taken place, but on which the company has not yet received notices or reports of loss. These may also be termed claims incurred but not reported.
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2019. All Rights Reserved.