Administrative staff and intermediary services

In light of the new fit and proper requirements, and more specifically the section pertaining to the appointment of representatives, the FSCA provided clarity in terms of the FSCA’s view on any personal assistant / administrative employee who performs any activity relating to financial services (also known as intermediary services as per the definition in the FAIS Act) on behalf of a representative.

With the increased volume of administrative duties and paperwork following the ever-increasing legislative and regulatory requirements, every representative started relying more on their personal assistants or administrative staff to perform office administration on behalf of the representative – without considering whether such administrative duties were considered to be intermediary services.

In other words, an intermediary service is performed by the personal assistants/administrative employees who assist clients...

  1. By receiving, submitting or processing claims on behalf of the client.
  2. By completing forms on behalf of the client.
  3. By adding or removing items from a short-term insurance policy.
  4. By adding or removing benefits from an insurance policy.
  5. Collecting premiums from a client in respect of a financial product.
  6. With any service performed by the administrative staff on instruction of a client to buy, sell, deal, invest or disinvest in, replace or vary a financial product.

All personal assistants who perform any of the above duties must be registered as a representative at the FSCA for rendering intermediary services only. Compliance will need to register them on the FSCA’s register from 1 April 2018, provided that they have received all the required documentation in terms of FICA and FAIS.

The practical implication is as follows:

Any person appointed as a representative (whether for advice, intermediary services or both) must meet the minimum fit and proper requirements. These are:

  1. Qualifications
  2. Experience
  3. Regulatory examinations
  4. Continuous professional development
  5. Product specific training
  6. Class of business training

All administrative staff or personal assistants to be registered on the representative register must have a matric or an equivalent school leaving qualification before they may be registered on the FSCA’s register.

Once registered on the FSCA register, the following will apply: Each personal assistant must obtain/receive the following whilst working under the supervision of a financial adviser within the same franchise:

  1. Product specific training for the products marketed by the financial adviser by 31 July 2018 (this training will be provided by the relevant product provider).
  2. 18 hours of continuous professional development between 1 June 2018 and 31 May 2019 (The FSP, Momentum Consult in partnership with an accredited and approved Training Provider, which will assist in obtaining and uploading CPD activities).
  3. Class of business training in the product classes marketed by the financial adviser by 31 July 2019 (this must be done by an accredited training provider such as Integrity Academy or Inseta accredited providers).
  4. The preparation for regulatory examination for representatives by 30 June 2020 (which can be done through MMI’s Learning and Development centre or an institution such as Integrity Academy).
  5. A full qualification recognised by the FSCA by 30 June 2024.

If the personal assistant or administrative employee assists with duties relating to short-term insurance and, for example, long-term insurance, the higher qualification requirement will apply.

Article written by:

Jackie Drotsky

Licenced Compliance Officer

Momentum Consult