Johan van Zyl, the chief executive of Sanlam, should take Ian Kirk, the chief executive of Sanlam subsidiary Santam by the ears, and Kirk in turn should take Basil Palmer, the chief executive of Stalker, Hutchison and Admiral (SHA), by the ears and tell Palmer to instruct his lawyers not to undermine the rights of consumers.

Failing this, Van Zyl, who is also the chairman of the industry body, the Association for Savings & Investment SA, is sending a message that you are on your own if you receive bad advice.

I do not for one moment believe that Sanlam does not try to keep a tight rein on its representatives, but this is the unfort-unate consequence of the urgent High Court application by financial adviser Deeb Risk to prevent the Ombud for Financial Services Providers from making determinations on the advice that Risk gave to pensioners to invest in high-risk property syndications.

The ombud’s office was established in the wake of another property disaster, Masterbond, which left thousands of pensioners destitute and resulted in at least 14 committing suicide.

At the time, the only recourse investors had was to sue through the High Court. Most could not afford to go to court, because the collapse of Masterbond had cleaned them out.

An interesting aspect of the Risk case is that Sanlam helped Personal Finance to research an article published in Personal Finance magazine in 2006 that explained the high risk of property syndications. Sanlam has also fired representatives for selling property syndications.

Gerry Anderson, the deputy executive in charge of market conduct at the Financial Services Board (FSB), says professional indemnity (PI) insurance is there to protect consumers so they can be compensated when they receive inappropriate advice.

But it seems that the main, and perhaps only, reason for PI insurance is to provide legal assistance to financial advisers so they can beat up consumers.

Palmer has confirmed to Personal Finance that SHA is funding the legal proceedings undertaken by Risk, and that SHA has assembled the legal team.

It is absolutely horrendous that this type of deep money pockets court action is being taken against pensioners, who, as SHA and Santam know very well, do not have the financial wherewithal to go to the High Court to fight for their rights.

In her affidavit rejecting Risk’s application, Noluntu Bam, the ombud, points out that this is the first challenge of its kind to her office. She says this is not surprising, “because the Financial Advisory and Intermediary Services (FAIS) Act, together with its subordinate legislation, which includes the powers and functions of the FAIS ombud, was written in consultation with the financial services industry”.

In my view, some of the arguments used by Risk – helped, no doubt, by the SHA legal team – are beyond the pale. To launch a personal attack on Bam is just plain sickening. She is far better qualified than most lawyers, and because she has the Certified Financial Planner accreditation, Bam is probably also way ahead of Risk in being qualified to sit in judgment of financial products.

I have no idea what Risk’s qualifications are. I do know that he holds none of the Financial Planning Institute’s accreditations, not even the lesser ones.

The cynicism of Risk and SHA in trying to convince the court that Bam should have used her discretion and referred the pensioners’ complaints to the High Court is equally unacceptable. SHA and Santam know full well that most pensioners are financially insecure and cannot afford to take on financial advisers, supported by companies such as SHA, which, in turn, can draw on the resources of Santam.

One of the arguments financial advisers used to convince desperate pensioners to invest in property syndications was that they would receive better returns than from other investments. The advisers either did not properly investigate or ignored the fact that in most cases the pensioners were paid an income from their own capital.

And, as Bam puts it in her affidavit, the pensioners probably placed their entire life savings in the syndication schemes, leaving them with nothing to fight a High Court action.

Bam also makes the point that Risk and SHA hope to delay a final outcome for as long as possible by fighting the battle in every court in the land, depleting the resources of the pensioners even further – to say nothing of the stress the pensioners will suffer and the probability that most of them will not outlive the process.

SHA obviously has a lot to lose if claims from financial advisers who inappropriately placed people in property syndications come pouring in. But this is the risk it knowingly took when it provided the PI cover.

Would Palmer or Kirk like to see their parents treated in such a foul manner? I would hope not. And if that is so, they should put a stop to this nonsense immediately. In fact, they should never have allowed it to get this far.

It is quite acceptable to challenge the merits of the financial advice ombud’s determinations before the FSB’s Appeal Board, but to do what is being done in this case is unacceptable.

Advisers who sold property syndications know very well that plenty of warnings about the fragility of these so-called investments were published in a wide range of publications, including Personal Finance.

My late fellow journalist, Deon Basson, whose untimely death was caused by his fight to expose Sharemax, wrote article after article, and even a book, about Sharemax. The directors of Sharemax saw fit to persecute Deon in every possible way, from attempting to sue him for millions to spreading scurrilous stories about him.

I suspect that financial advisers sold – and some still sell – property syndications because of the commissions they could earn. These commissions ranged from six to 15 percent of the invested amount – way above the amounts paid for more respectable and safer investments.