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Financial Advisory and Intermediary Services Act (FAIS Act)

The FAIS Act aims to protect you by prescribing how financial services, i.e. advice and intermediary services, in respect of your policy or investment, should be rendered to you.

The FAIS Act aims to protect you by prescribing how financial services, i.e. advice and intermediary services, in respect of your policy or investment, should be rendered to you.

The FAIS Act regulates the financial services industry; decreeing that advisers have licences in order to operate lawfully. Momentum has committed itself to work and partner only with intermediaries who are licensed by the Financial Services Board under the FAIS Act.

The FAIS Act also requires intermediaries to carefully consider which product is suitable for their client and to provide services in an honest, fair way with due skill and care.

More to know

The FAIS General Code of Conduct has specific duties that relate to authorised financial service providers (FSPs), and this includes the obligation, to disclose specific information about the product supplier, the intermediary and the financial service (the product). We list some of the more important required disclosures herein below:

Information about the product supplier Open
  • Name, address and contact details
  • Names and contact details of the compliance and complaints departments
  • Information about the intermediary
  • Full business and trade names, address and contact details
  • Details of the legal and contractual status of the intermediary and the intermediary's contractual relationship with the product supplier and services providers
  • Details of the financial service that the intermediary is authorised to provide under the relevant Financial Service Provider (FSP) licence, as well as any conditions or restrictions that apply to this
  • Whether the intermediary holds guarantees or professional indemnity or fidelity insurance or not
  • Any conditions or restrictions that the insurer/s imposed on the types of financial products or services that the intermediary may provide
  • Any personal interest that the intermediary may have in the financial service, as well as any conflict of interest
Information about the financial service Open
  • General explanation of the nature and material terms of the relevant contractor transaction; name and type of the financial product and the nature and extent of the benefits
  • Material contractual information, illustrations, projections or forecasts
  • Any charges and fees to be levied against the product, including the amounts, and their frequency to enable the client to determine the net investment amount
  • Nature and extent of monetary obligations that the client assumed, directly or indirectly, in favour of the insurer and in favour of the intermediary
  • Nature, extent and frequency of any incentive, remuneration, consideration, commission, fee or brokerage that any insurer has to pay to the intermediary, or for which the intermediary may become eligible, as a result of rendering of the financial service
  • Details of any special terms or conditions, exclusions or liability, waiting period, loadings, penalties, excesses, restrictions or circumstances in which the insurer will not provide benefits
  • Details of any guaranteed minimum benefits or other guarantees
  • Any restrictions on or penalties for the early termination of or withdrawal from the product or other effects, if any, of such termination or withdrawal
  • Whether the insurer offers cooling-off rights and if so, procedures for exercising such rights
  • Any material investment or other risks associated with the product
Information when replacing a policy Open

When replacing an existing policy with a new policy, your intermediary must provide you with comprehensive disclosure and analysis of the potential consequences of the replacement, including but not limited to:

  • Any duplicated costs and any loss of benefits
  • The extent to which the replacement is appropriate to your needs
  • The difference between the replaced and the replacement policies and any appropriate alternatives to effecting a replacement.
Code on Conflict of Interest Open

The Financial Services Board (FSB) issued an amendment to the General Code of Conduct, to incorporate provisions relating to conflicts of interest by FSPs.

The main objective of the amendment is to ensure that FSPs place clients with product providers that provide the best products in terms of the client's financial needs, and not because of any relationship that may exist between the product provider and the FSP.

FSPs must, according to the Conflict of Interest provisions, where possible, avoid situations in which a conflict of interest may arise between the FSP and their client.

Where avoidance is not possible FSPs must take reasonable steps to mitigate this conflict.

The Conflict of Interest provisions requires FSPs to disclose in writing conflicting situations to clients and the measures taken to avoid or mitigate the conflict.

It also requires FSPs to adopt, maintain and implement a conflict of interest management policy.

Momentum has a conflict of interest policy for each of its FSPs: Momentum conflict of interest management policy Momentum Short-term Insurance conflict of interest management policy Advice@Work conflict of interest management policy Macdonald Mills O'haher Employee Benefits conflict of interest management policy Momentum Corporate Consultant conflict of interest management policy Momentum Wealth conflict of interest management policy