FAIS Act
Financial Advisory and Intermediary Services Act
Regulates the rendering of financial advice and intermediary services by requiring licensing, fit and proper standards, disclosure, and conflict of interest management to protect financial consumers.
Sections
5
Duties
5
Questions
11
Assessment from
R 55 000
What it covers
The Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS) regulates anyone who renders 'financial services' — defined broadly to include advice and intermediary services in respect of financial products such as long-term and short-term insurance, retirement funds, investments, and securities. FAIS requires every Financial Services Provider (FSP) to be licensed by the Financial Sector Conduct Authority (FSCA) before rendering financial services. The Act introduces 'fit and proper' requirements covering honesty and integrity, competence (qualifications, experience, and Regulatory Examinations), operational ability, and financial soundness — applicable to the FSP itself, its Key Individuals, and its Representatives. FAIS is given operational effect through the General Code of Conduct (the 'FAIS Code'), which imposes detailed disclosure obligations (product information, fees, commissions, conflicts), suitability/needs-analysis requirements before giving advice, record-keeping obligations, and complaints-handling requirements. The Act also created the Office of the Ombud for Financial Services Providers (FAIS Ombud) to resolve consumer complaints, and gives the FSCA wide supervisory and enforcement powers including debarment of representatives and key individuals found guilty of misconduct. FAIS sits within the broader Treating Customers Fairly (TCF) framework and increasingly the Conduct of Financial Institutions (COFI) Bill, which will eventually replace and consolidate FAIS once enacted.
Does this apply to you?
It applies if
- Your organisation gives advice on financial products (insurance, investments, retirement funds, securities) to clients
- Your organisation acts as an intermediary — arranging, marketing, or facilitating the conclusion of financial product transactions on behalf of a client or product supplier
- Your employees or representatives discuss, recommend, or sell financial products to members of the public or corporate clients
- You receive commission, fees, or any form of remuneration linked to financial product sales or advice
Thresholds that change what's required
- There is no minimum size or transaction value threshold — a single representative giving advice on a single policy requires the organisation to be a licensed FSP
- Different FSP licence categories (Category I, II, IIA, III, IV) apply depending on whether the FSP gives advice only, has discretion over investments, or operates a hedge fund — the specific category determines additional capital adequacy and operational requirements
Exemptions
- Activities specifically excluded from the definition of 'financial service' under FAIS s1(1) (e.g. certain administrative functions that do not involve advice or intermediary services)
- Representatives acting under licensed supervision who do not independently render advice may have reduced individual obligations, though the FSP itself remains fully licensed and accountable
What non-compliance costs
Maximum fine
R 10 000 000
Imprisonment
Up to 10 years for rendering financial services without a licence or for fraudulent conduct in connection with financial services
Civil exposure
Clients who suffer loss due to inappropriate advice or non-disclosure may claim damages through the FAIS Ombud (without cost) or through civil court action; FSPs can be ordered to compensate clients directly
Reputational
FSCA enforcement actions, debarments, and Ombud determinations against an FSP are published and searchable on the FSCA and Ombud websites, materially affecting client trust and the ability to attract new representatives or distribution partners
What the assessment covers
The assessment works through 11 questions across 5 duties, scored out of 135. Each answer generates the specific actions needed to close or prove that duty — and a “yes” only counts once its evidence is in, which is what makes the score defensible rather than self-declared.
The questions themselves are part of the assessment.
Find out where you stand on FAIS Act
Run the assessment, get your score, and get the exact list of what to fix — with the evidence trail an auditor will ask for.