🔑 Quick Facts

• All financial advisors in SA must be registered with the FSCA
• Ask for the advisor’s FSP number and verify it online
• The CFP® designation is the highest standard for financial planners
• Legitimate advisors never ask for upfront fees before providing services
• You can lodge complaints for up to R3.5 million with the FAIS Ombud (from July 2024)

1. What is a Certified Financial Advisor?

A certified financial advisor is someone who helps you manage your money. They give you advice about saving, investing, insurance, and retirement planning. In South Africa, they must follow strict rules to protect you.

The word “certified” means they have passed exams and meet certain standards. Not everyone calling themselves a “financial advisor” has proper qualifications. This is why you must always check.

What Does a Financial Advisor Do?

A good financial advisor can help you with:

• Budgeting: Creating a plan for your income and expenses
• Saving: Choosing the best savings accounts or products
• Investing: Putting money into shares, unit trusts, or property
• Insurance: Life cover, funeral policies, car and home insurance
• Retirement: Pension funds, retirement annuities, and provident funds
• Tax planning: Legally reducing how much tax you pay
• Estate planning: Wills and leaving money to your family

2. Understanding Advisor Designations

In South Africa, the Financial Planning Institute (FPI) awards different titles to financial advisors. These titles tell you how qualified someone is. The higher the title, the more training they have.

Designation	What It Means	Education Level
CFP® Certified Financial Planner	Highest qualification. Can do complete financial planning. Internationally recognised.	NQF Level 8 (Postgraduate)
FSA® Financial Services Advisor	Mid-level qualification. Good for general financial advice.	NQF Level 6-7 (Diploma/Degree)
RFP® Registered Financial Practitioner	Entry-level professional designation. Starting point for new advisors.	NQF Level 5 (Certificate)

The “Four Es” to Become a CFP®

To earn the CFP® designation, advisors must complete the “Four Es”:

✅ 3. How to Verify Your Financial Advisor

This is the most important section of this guide. Always verify before giving anyone your money or personal information.

Step 1: Ask for Their FSP Number

Every legitimate financial advisor must have an FSP (Financial Services Provider) number. This number should appear on their business cards, letterhead, and emails.

Ask them directly: “What is your FSP number?” A real advisor will tell you immediately. If they hesitate or refuse, walk away.

Step 2: Check on the FSCA Website

Step 3: Verify Their Professional Designation

If someone claims to be a CFP®, FSA®, or RFP®, check with the FPI:

Step 4: Use the JSE Broker Verification Tool

The Johannesburg Stock Exchange has a free tool to verify brokers:

Go to: www.jse.co.za/verify-a-broker-or-fsp

🚨 4. Financial Advisor Scams to Watch Out For

Between January and February 2025 alone, the FSCA issued 9 public warnings about financial scams. Fraudsters are getting more sophisticated. Here’s how to protect yourself.

🔴 Red Flags – Walk Away Immediately If:

• Guaranteed high returns: “You’ll make 50% in 3 months!” – No legitimate investment can guarantee returns
• Upfront fees: They ask you to pay money before providing any service
• Pressure to act fast: “This offer expires today!” – Legitimate advisors give you time to think
• Contact only via WhatsApp/Telegram: Real advisors have offices and proper phone lines
• No paperwork: They refuse to give you written information about investments
• Secret strategies: “We can’t tell you how it works, just trust us”
• Celebrity endorsements on social media: These are often deepfake videos

Common Scam Types in South Africa (2025)

Scam Type	How It Works
Impersonation Scams	Scammers pretend to work for real companies like Old Mutual, Sanlam, or Alexander Forbes. They copy websites and use similar names.
Deepfake Videos	AI-created videos showing famous people like Patrice Motsepe “endorsing” fake investments. Gold Earnings Hub and Africa Gold Capital were caught doing this in January 2025.
Ponzi/Pyramid Schemes	They pay early investors with money from new investors. Eventually collapses and everyone loses money.
Crypto Scams	Fake cryptocurrency “trading” platforms. Legitimate crypto providers must now be FSCA registered.
“Finfluencer” Fraud	Social media influencers without qualifications giving financial advice. Often paid to promote risky products.

Where to Report Scams

5. How to Choose the Right Financial Advisor

Finding a good financial advisor is like finding a good doctor. You want someone qualified, trustworthy, and who understands your needs.

Questions to Ask Before Working with an Advisor

Types of Financial Advisors

Type	Pros	Cons
Independent Advisor Works for themselves	Can recommend products from any company. More choice for you.	May be harder to find. Less brand backing.
Tied Agent Works for one company	Expert in that company’s products. Easy to find at banks and insurers.	Can only sell products from their employer. Limited choice.
Multi-tied Agent Works with a few companies	More choice than tied agent. Still has support from partner companies.	Still limited compared to fully independent.

Where to Find a Qualified Advisor

• FPI Find a Planner: www.fpi.co.za – Search for CFP® professionals
• Major insurers: Old Mutual, Sanlam, Liberty, Discovery, Momentum
• Banks: FNB, Standard Bank, ABSA, Nedbank, Capitec
• Referrals: Ask family and friends who they use

💰 6. What Financial Advisors Cost

Financial advisors are paid in different ways. Understanding this helps you know if you’re getting good value.

Payment Methods

Method	How It Works	Typical Amount
Commission	The product provider pays the advisor when you buy a product. You don’t pay directly.	Built into product costs (varies by product)
Fee-based	You pay the advisor directly for their time and advice. Usually hourly or a flat fee.	R500 – R3,000+ per hour or flat fee per plan
Percentage of assets	You pay a percentage of the money they manage for you. Common for investment management.	0.5% – 1.5% per year of total investment
Retainer	You pay a monthly or yearly fee for ongoing advice and reviews.	R500 – R5,000+ per month

Financial Advisor Salaries in South Africa (2025)

Understanding what advisors earn can help you understand the industry:

⚖️ 7. Your Consumer Rights

South African law strongly protects consumers who use financial services. Know your rights.

Your Rights Under the FAIS Act

What Your Advisor MUST Do

📝 8. How to Complain About Bad Advice

If a financial advisor gave you bad advice that caused you to lose money, you have options. The process is free and you don’t need a lawyer.

Step-by-Step Complaint Process

FAIS Ombud Contact Details

Other Places to Complain

Body	What They Handle	Contact
Ombudsman for Banking Services	Bank accounts, credit cards, loans from banks	0860 800 900 www.obssa.co.za
Long-term Insurance Ombud	Life insurance, funeral policies, endowments	0860 103 236 www.ombud.co.za
Short-term Insurance Ombud	Car, home, and business insurance	0860 726 890 www.osti.co.za
Pension Funds Adjudicator	Pension and provident fund disputes	012 346 1738 www.pfa.org.za
Credit Ombud	Credit agreements, store cards, credit bureau issues	0861 662 837 www.creditombud.org.za

📚 Regulatory Examinations (RE1 & RE5)

All financial advisors in South Africa must pass regulatory exams. This is another way to check if someone is legitimate.

Exam	Who Must Write It	Details
RE5	Representatives (advisors who give advice to clients)	50 questions, 65% pass mark Fee: ~R1,226
RE1	Key Individuals (managers who oversee advisors)	80 questions, 65% pass mark Fee: ~R1,226

Moonstone is the only FSCA-authorised body to conduct these exams. Be wary of anyone selling “RE5 certificates” – these are fake.

Before Working with Any Financial Advisor:

1. Always verify their FSP number on the FSCA website
2. Check their designation with the FPI if they claim to be CFP®, FSA®, or RFP®
3. Never pay upfront fees – legitimate advisors don’t ask for money before providing services
4. Get everything in writing – verbal promises mean nothing
5. Don’t be pressured – take your time to think about any financial decision
6. Trust your instincts – if something feels wrong, walk away

If You’ve Been Scammed:

1. Report immediately to FSCA (0800 20 3722) and SAPS
2. Gather evidence – save all messages, emails, and documents
3. Contact your bank – they may be able to stop or reverse payments
4. Don’t send more money – even if the scammer says it will “release” your funds
5. Warn others – share your experience to protect family and friends