Body ready to expose opaque investments
Independent advisers demand openness, threatening to name and shame companies
A new organisation representing independent financial advisers plans to name and shame financial product providers that are not transparent about their companies or products. The newly launched South African Independent Financial Advisors' Association has sent more than 80 asset management, investment platform, unit trust and offshore investment companies a set of questions aimed at extracting information the advisers need to perform a due diligence on the companies' products. Most advisers who recommended failed investment products - such as the property syndication Sharemax, foreign exchange trader Leaderguard or the hedge fund of Herman Pretorius's Relative Value Arbitage Fund - were motivated to do so by high commissions and failed to conduct adequate due diligence checks. The Financial Advisory and Intermediary Services Act requires advisers to give you advice with "due skill, care and diligence". This means your adviser should take reasonable steps to determine whether a pro-d...
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