By Ashleigh Brown, journalist, Justmoney
This year there have been several warnings sent out by the Financial Services Board (FSB) regarding financial scams and frauds. The FSB have warned consumers to be careful, and to make sure the financial service providers are licenced and reputable. The latest warning is against Discount Mart Cleaning Services CC.
The FSB has warned against conducting financial business or investing funds with Discount Mart Cleaning Services CC trading as DMC Holdings (DMC). Consumers have also been warned to not conduct any business with Adool Younus Karim who acts on behalf of DMC.
The FSB said in a statement that: “the above mentioned persons are rendering financial services without being authorised to do so in terms of the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS Act) and in particular they are not authorised to sell any financial product to the public or to receive or hold investment funds from the public.”
The FSB is currently conducting an inspection into DMC, which is still on-going. However, at the time of publishing the FSB could not tell how many people were affected by DMC, or what the fine against DMC would be.
Know your advisor
“At the outset you need a good relationship with your financial advisor. This relationship, like any other, should be based on transparency and trust. So it stands to reason that you should get to know your financial advisor as much as possible before taking his advice,” said Paul Roelofse, a consumer advocate of the Financial Planning Institute.
Roelofse went on to say that consumers should ask their financial advisors for their certificates in order to see if they are licensed or not. “People must ask to see their financial advisors licences, and to ask who they work for,” said Roelofse.
Consumers should also ask their financial advisors who they work for, and what services they are qualified to give, before accepting any financial advice. Furthermore, consumers should check the credentials of their financial advisors on the FSB website (information below).
FAIS Act
In order to create a safe and responsible investment environment for investors, the FAIS Act was introduced. This act contains detailed provisions and rules relating to the requirements for persons or entities wishing to offer financial services to the public.
“Such persons and entities need to be authorised (licensed) by the Registrar who will, in doing so, scrutinize the applicants for their fitness and propriety in relation to personal character qualities of honesty and integrity, competence, operational ability and financial soundness,” said the FSB.
Previous cases
Justmoney released an article about Molo Funeral Services and the fine they received from the FSB for selling unregistered financial policies. Adding to this, earlier this year there were reports on other funeral homes which sold insurance policies without a proper license.
The FSB has so far warned the public against doing business with the following entities: Faizel Dollie Funeral Home, Clarinise Funeral Services, Abomelezi Funeral Services cc, Speelman Family Funeral Home, City Funeral Fund, Holy Cross, Maphutha Dihuswana Funeral Group, Tshwaragano Funerals and Omega Funeral Services.
“When taking out a funeral policy, consumers must ask the company if it is registered with the FSB and confirm the information they are provided with the FSB before taking out a policy,” said the FSB.
Tips
If you are unsure whether the person or business offering you financial services is registered or not, please call the FSB on 0800110443 or visit their website: www.fsb.co.za.
If you would like apply for investments from a reputable financial service, click here. Or need a personal loan, click here.