FNB adviser banned after client loses R500,000 from poor advice.
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A FINANCIAL adviser has been debarred by First National Bank after a tribunal found serious breaches of integrity, including prioritising personal gain over a client's interests.
The tribunal panel chaired by Advocate Sandhya Mahabeer SC dismissed an application by Anusha Singh to reconsider her debarment under the Financial Advisory and Intermediary Services Act (FAIS).
The case centres on Singh’s handling of a long-standing client’s R2 million investment in a Discovery Invest Guaranteed Income Plan from which she was receiving returns of R9,125.00 every month.
The client had initially sought to access about R50,000 from her investment.
Instead of exploring less harmful options, Singh advised the client to surrender the entire policy to a third-party entity, Value Added Solutions (VAS). The transaction resulted in the policy being sold for approximately R1.5 million.
While part of the proceeds was reinvested, the client ultimately suffered a loss of about R500,000 in capital and saw her monthly income drop from R9,125 to roughly R7,000.
The tribunal found that the client had never intended to liquidate her full investment, raising serious concerns about the appropriateness of the advice given.
A key issue in the case was Singh’s financial relationship with VAS. Evidence revealed that she received around R260,000 from the company between 2022 and 2024.
Singh admitted to receiving at least R50,000 linked to the client’s transaction, which she described as a “token of gratitude”. However, the panel found that these payments far exceeded permissible thresholds and were not disclosed to her employer.
Further, the payments were allegedly disguised in bank records under misleading descriptions such as “chairs”, “bicycles” and “tyres”, suggesting an attempt to conceal their true nature.
The tribunal concluded that Singh acted in conflict of interest, failed to disclose material financial benefit, earned “double commission” through both the cession and reinvestment, and did not act in the client’s best interests.
The tribunal also rejected Singh’s claim that she had fully informed the client of all available options.
It found that her advice was incomplete and misleading, particularly her assertion that the client could not access funds from the investment within a certain period. Evidence showed that partial withdrawals were in fact possible.
The panel further criticised Singh for failing to ensure the client—whose primary language was not English—fully understood the implications of the transaction.H
In upholding the debarment, the tribunal emphasised that financial advisers must meet strict “fit and proper” requirements, including honesty and integrity.
It found that Singh’s conduct demonstrated “a series of material failures” and posed a risk to the investing public.
“The applicant failed to act in the best interests of the client and prioritised personal gain,” the panel concluded.
Singh argued that she acted on the client’s instructions, believed her conduct was acceptable, and should have been treated with leniency.
However, the tribunal rejected these arguments, finding no basis to interfere with FNB’s decision.
The application for reconsideration was dismissed, confirming Singh’s debarment and effectively barring her from operating in the financial services industry.