FSCA fines Middelburg insurance broker R1 million and debars her for 15 years

The Financial Sector Conduct Authority (FSCA) has fined a Middelburg insurance broker, Adell van Wyk, R1 million and debarred her for 15 years after finding in an investigation that she processed a payment without the consent of a client. The brokerage, Wenru, was also fined R100 000 for failing to exercise the required care and diligence.

The FSCA says in a statement that the findings of its investigation include that Van Wyk instructed Wenru to process payments without the relevant client’s consent and that Wenru failed in its duties to observe the utmost good faith and exercise the care and diligence required.

According to the FSCA, it is taking regulatory action because Van Wyk and Wenru contravened provisions of the Financial Advisory and Intermediaries Services Act, the General Code of Conduct for Authorised Financial Services Providers and Representatives, the Financial Institutions (Protection of Funds) Act and the Determination of Fit and Proper Requirements for Financial Services Providers.

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Van Wyk not allowed to practice until 2039

The debarment means that Van Wyk is prohibited from providing or being involved in the provision of, financial services, acting as a key person of a financial institution and from providing specified financial services to a financial institution, whether under outsourcing arrangements or otherwise.

According to News24, Van Wyk (50) has more than 20 years of experience and was a director of Wenru before resigning in 2020. She helped to found the brokerage in 1998.

Peet Wentzel, director of Wenru, told News 24 that the matter referred to a single client who enquired about the payment at Wenru and that the brokerage investigated immediately and notified the relevant authorities as required by regulation.

He said the client is claiming the money back from Van Wyk in a civil case and that Wenru will take the decision of the FSCA on appeal to the Financial Services Tribunal “in the interest of fairness and balance”.

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Consumers urged to always check registration of financial service providers

The FSCA once again urged members of the public to always check:

• that the entity or individual they are dealing with is authorised by the FSCA to provide financial products and services, including giving recommendations about how to invest.
• what category of advice the person or entity is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
• that the FSP number the entity or individual offering financial services uses matches the name of the FSP on the FSCA database.

Consumers can use one of these methods to confirm the status and FSP number of a service provider or a person who claims to be an authorised service provider:

• call the FSCA’s toll-free number: 0800 110 443
• do an online search for authorised financial institutions by license category here
• do an online search for a financial institution that is an authorised FSP in terms of the FAIS Act here.