JOHANNESBURG - A Mossel Bay financial adviser who denied providing financial advice to an elderly couple has been ordered to repay them the R1m they jointly invested on his advice in the failed Bluezone property syndication scheme.

Pensioners Guillaume Groenewald and his wife Maria invested R500 000 each in June 2006 in the Flextronics income plan promoted by Bluezone Property Investments on the advice of Roelof Nel of R&M Advisors.

The couple claimed Nel informed them that their investments were safe and could could never “go bust” or fail because the Flextronics building underlying the investment was already established.

However, Noluntu Bam, the ombud for financial services providers (Fais), said in her determination that Nel’s contention that the couple held shares in the property was incorrect because their money was invested in a holding company that lent investors’ funds to a property company.

Bam said that in exchange for the loan, the holding company would then obtain 85percent of the shares in the property company. She stressed Nel had not provided any supporting documentation to suggest his clients had a right to the immovable property.

Bam said Nel denied rendering financial advice to the couple and they had made a specific “once off request” despite Nel’s earlier response to her office, where he conceded that he rendered financial services to the couple and even conducted a risk profile analysis for the purpose of providing such advice. Bam said the undisputed facts proved that Nel advised the couple.

Nel claimed Guillaume Groenewald ignored safer and conservative investments because he was “shopping” for the best interest rates. He further claimed he did not make his own representations to the couple but relied on material provided by Bluezone, allegedly approved by the Financial Services Board.

Nel further denied advising the couple the investment was guaranteed and claimed they rejected guaranteed options. Bam said Nel believed he complied with the Fais Code in that he provided the couple with the investment documentation and allowed them time to consider it without any pressure from his side and strongly denied causing their loss.

She said the couple’s losses were caused by Nel’s failure to adhere to the law when providing advice to the couple and had he truly appreciated what he was advising them to invest in, he would have steered them in a different direction.