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BLUECHIPPRACTICE MANAGEMENT | ComplianceRecord of advice: various definitionsoften lead to misinterpretationIn my experience over the last two decades, if you had to ask 100 advisors what their definition of a record ofadvice is, you will probably get 100 different answers.Iwill go out on a limb and state that maintaining a record ofadvice is a requirement that has come to stay in one form oranother, whether in terms of the provisions of the FAIS Act,CoFI or any future market conduct legislation. It is one ofthe provider obligations that has been firmly established sincethe implementation of the Financial Advisory and IntermediaryServices (FAIS) Act in 2004, which is that a provider must maintaina record of the advice furnished to a client.Some advisors refer to the client proposal as the record ofadvice and others refer to a quotation as the record of advice, bothof which are only partially correct. Others refer to the followingprovisions in section 9 of the General Code of Conduct as thedefinition of a record of advice:(1) A provider must, subject to and in addition to the duties imposedby section 18 of the Act and section 3(2) of this Code, maintain arecord of the advice furnished to a client as contemplated in section8, which record must reflect the basis on which the advice was given,and in particular -(a) a brief summary of the information and material on which theadvice was based;(b) the financial products which were considered;(c) the financial product or products recommended with anexplanation of why the product or products selected, is or are likelyto satisfy the client’s identified needs and objectives; andProvided that such record of advice is only required to be maintainedwhere, to the knowledge of the provider, a transaction or contractin respect of a financial product is concluded by or on behalf of theclient as a result of the advice furnished to the client in accordancewith section 8.Even though the title of section 9 of the General Code of Conductrefers to a record of advice, only complying with these provisionswithout other supporting documentation will fall way short ofwhat a record of advice is.From most determinations, it appears that the FAIS Ombudexpects to see a record of advice as a specific document in aspecific format when considering client complaints. It is ourinterpretation, in accordance with the Financial Services Tribunaldecision, that all documentation used during the advice process,and all correspondence during this process, forms part of therecord of advice.According to the Financial Services Tribunal decision, JohannesMostert and Leoni Landman [FAB 127/2018], all documentationused during the advice process and all correspondence during thisprocess form part of the record of advice. After more than 20 yearsof market conduct legislation through the FAIS Act, many of theindustry stakeholders in the financial services industry still refer tothe record of advice as one single document, which often leads tothe unnecessary duplication of information and documentation.This interpretation by the Financial Services Tribunal is furthersupported by the following provisions in the FAIS Code of Conduct:66 www.bluechipdigital.co.za

2TECHNICALVERIFIABLE HOURSCOFI Update withAnton Swanepoel, CFP17th June 2025®