Moonstone Monitor: Life application from unlicensed broker refused

The Plot Thickens

It seems that it is not only my waist that suffers in this regard.

A few weeks ago we pointed out that from 1 May product providers will be obliged to ascertain whether advisors are properly licensed before accepting business from them. Those providers who do not check FSP license conditions run the risk of having their licenses suspended for selling products they are not licensed for, albeit inadvertently so.

We received the following SOS from a reader last week:

“Can you help me here please? Sanlam say they cannot accept my Life application as I do not have category B on my FSB license.”

In order to sell products providing life cover, or where the underlying investment contains a guarantee, you need to be licensed for long-term Category 1B. The fact that you are licensed for category 1C does not qualify you automatically for 1A and 1B.

This was thrashed out with the FSB in 2005 already when they made a concession to those who had made the wrong assumption at the time. That concession is unfortunately no longer available, so if you are in the same predicament, your only recourse is to apply to the FSB for the required categories to be added to your license via an application for a profile change.

In effect this means that those who have been selling category 1B products without having it on their licenses have been contravening their licensing conditions and have run the risk (and still do) of having their licenses revoked.

Please check your license conditions on the document itself, or on the FSB website. If you need to add category 1B, you can approach the FSB directly or contact Karin of Moonstone for help and advice at 021 883 8000 or by e-mail to [email protected].