Its all in the definition

Gerry Anderson at the FSB provides the FSB perspective about the media and advice.

He starts off by saying that this is a very important debating point. "It is also one that I have been questioned about a number of times in the past." 

To get to the answer, we have to look at the definition of "advice" in the FAIS Act where advice is broadly defined.  Thereafter, one has to look at section 1 (3) of the Act itself which reads as follows:
 
"(a) advice does not include-
 
(i) factual advice given merely
 
(aa) on the procedure for entering into a transaction in respect of any financial product;
(bb) in relation to the description of a financial product;
(cc) in answer to routine administrative queries;
(dd) in the form of objective information about a particular financial product;  or
(ee) by the display or distribution of promotional material;
 
(ii) an analysis or report on a financial product without any express or implied recommendation, guidance or proposal that any particular transaction in respect of the product is appropriate to the particular investment objectives, financial situation or particular needs of a client;
(iii) advice given by
 
(aa) the board of management, or any board member, of any pension fund organization or friendly society referred to in paragraph (d) of the definition of 'financial product' in subsection (1) to the members of the organization or society on benefits enjoyed or to be enjoyed by such members;  or
(bb) the board of trustees of any medical scheme referred to in paragraph (g) of the said definition of 'financial product', or any board member, to the members of the medical scheme, on health care benefits enjoyed or to be enjoyed by such members;  or
(iv) any other advisory activity exempted from the provisions of this Act by the registrar, after consultation with the Advisory Committee, by notice in the Gazette;"

According to Anderson the purpose of the above quotation is also to balance objective descriptions of financial products and even advice thereon, with advice that may lead a client to conclude a transaction.
 
The first is akin to education whilst the latter is specific.  The freedom of the press must also be kept in mind. Nevertheless it would be incorrect for a journalist to recommend a certain product without being licensed as a FSP. 

If a complaint is received about a certain article or broadcast, we would have to test it against the definitions referred to above and if it is concluded, that specific advice did take place, we would have no other option than to take action in terms of the Act against the journalist concerned.

Editors thoughts:
* IFAs would need to understand their clients and their needs and if 'irrational' changes are requested perhaps it's a good idea to get to the bottom of the decision making tree and investigate the source.

* The issue really is that the FSB would act on a complaint, and it's thus the responsibility of the IFA to complain, as it's unlikely that a consumer will complain, unless there is a capital loss.