The Financial Sector Conduct Authority (FSCA) recently published a communication related to the use of ‘Prepopulated Records of Advice’. Whilst the communication is with specific reference to when a financial product is replaced with another financial product, the application in terms of the use of the record of advice (ROA), is very relevant to every representative (F&I)!
Section 2 of the FAIS General Code of Conduct is always your measure to determine if you have done what is expected of you as a FAIS representative. It requires you to “at all times render financial services honestly, fairly, with due skill, care and diligence, and in the interests of clients and the integrity of the financial services industry.”
Incorrect Advice – The risk is that a prepopulated ROA can result in incorrect advice being provided to customers. Under FAIS, the FSP and representatives are held accountable for the advice provided to customers – hence, it is a major risk if the details about the products and the advice provided are not correct. Thus, if the advice is incorrect, the dealer will have to pay the customer for the claims as per the advice provided!