Illustration: Colin Daniel

The newly instated Ombud for Financial Services Providers, Naresh Tulsie, has recently issued several determinations against financial advisers who put their clients into risky property syndication investments and who lost their capital.

  • Impectus Brokers and Financial Services of George, Western Cape, and two of its representatives, Francois van der Walt and Andre Jonck, were ordered to repay Mrs JCM and the estate of her late husband, Mr JJM, R500 000 each, after they invested in the Bluezone property syndication.
  • Van Strijp Financial Advisors of Mooikloof, Pretoria, and its representative Anna van Strijp were ordered to pay an undisclosed amount to Ms SR, who was persuaded to invest in the Sharemax Waterfall Estate development.
  • Teo Herselman Brokers of Bredasdorp, Western Cape, and its representative Teober Herselman were ordered to repay Mr EvD the R100 000 he invested in one of the Highveld syndications operated by the Orthotouch Property Group.
  • Liversage Financial Services of Umgeni Park, KwaZulu-Natal, and its representative Johann Liversage, were ordered to repay Mr DC the R700 000 he invested in two Sharemax developments, Mont Rouge Holdings and Rivonia Holdings.

The ombud also issued two insurance-related determinations:

  • Rekathusa Funeral Parlour, of Alabama, Klerksdorp, and its representative Job Dada, were ordered to pay Mr GG R15 000 funeral cover after his wife died and he tried unsuccessfully to claim on his funeral policy. The ombud’s office could find no evidence that the funeral parlour had ever been licensed in terms of the FAIS Act, or that a valid underwriting agreement existed to ensure its solvency.
  • Pieter de Wet and his business, Model Insurance Company, of Pinetown, KwaZulu-Natal, were ordered to pay Mr DM R172 145 for the damage he sustained to his car, which was supposedly covered by a Model Insurance vehicle policy. An criminal investigation into Model Insurance found that the company had acted illegally by issuing fraudulent policies and taking clients’ premiums but never paying out claims, and that it had never been registered as a short-term insurance company under the Short Term Insurance Act.