• Tweet

WATCHDOG: Ombudsman Noluntu Bam enforces the industry code of practice.

 Industry ombudsman can get your money back if you are badly served. 

RELATED ARTICLES

• Reserve Bank warns about dodgy investments
• How to get swindled in few months
• 'People are not investing as they used to'
• Broken telephone of financial ruin
• 'Slack' Road Accident Fund under fire
• Getting out of debt
• Fed-up with exploitation
• Bank client paid, but debt firm lawyers demand more money
• Riddle of the 'stolen' car
• Investors duped into losing savings

Richard Netshisaulu, 56, regrets ever listening to his financial adviser, Breteus Koetzer, who recommended that he move his money to a Sharemax investment.

Netshisaulu, of Mutale village in Thohoyandou, says he had his his R1million safely invested with Standard Bank and Liberty Life when Koetzer assured him that there were no risks involved in moving his money to Sharemax.

Netshisaulu says Koetzer has been his financial adviser for many years.

"I did not doubt his advice since he had previously helped draft my will, which Standard Bank has kept.

"He actually helped me withdraw my money before he invested it in Sharemax," says Netshisaulu.

Sharemax, a real estate property investment company, engages in renting, operating and managing shops and offices. It now operates as a subsidiary of Realcor Holdings.

Netshisaulu says the investment was for two years but he got the shock of his life when he received a letter notifying him that he had to wait for a further six years since Sharemax had been taken over by another company.

He says Koetzer worked for Standard Bank and he believes the bank should be held liable for the incorrect "expert" advice its employee gave him to his detriment.

Kershia Singh, a media relations officer at Standard Bank, says the the bank was aware of the matter.

"This issue is currently before the FAIS ombud. As such, Standard Bank is not in a position to comment until the process has run its course," she says.

A week ago FAIS ombudsman Noluntu Bam ordered D Risk Insurance Consultants and Deeb Raymond Risk to refund Lionel and Catherine Walters' R300000 after giving their clients wrong investment advice.

They, too, were advised to invest their money with Sharemax in The Villa, a public property syndicate.

At the time the pensioners were largely reliant on income from their investment to support themselves.

A monthly income was paid until July 2010, when it stopped.

They later received news that Sharemax was experiencing cash flow problems and the monthly payments would not be made.

"Considering our risk profile, the advice we were given was clearly not a product of due skill, care and diligence. The advice was neither fair, honest nor appropriate," the pensioners said.

Bam has brought a smile to their faces.

She ordered D Risk Insurance Consultants and Deeb Raymond Risk to refund their R300,000 plus interest before the end of July.

She said D Risk had failed to disclose the material aspect of risk in the Sharemax The Villa investment.

The consultants failed to act with due skill and diligence in the interest of their clients and with the integrity demanded by the code of the financial service industry.

• It is essential for consumers to invest money with reputable and long-standing financial institutions so that in the event of problems consumers will not lose their money.

For example, two months ago Bam ordered Standard Bank to give a refund to a consumer who had been defrauded by an employee of the bank.

Nelson Tshitema of Mapetla, Soweto, was defrauded of R400,000 under the pretext that his nest egg was being moved to a better performing investment.

Tshitema said the problem started after he received a phone call from a financial adviser from the bank five years ago.

The bank employee, Lazarus Mocwiri, and a Liberty Life financial consultant, Sipho Dlamini, invited Tshitema to Standard Bank's Smal Street branch in Johannesburg, and advised him to move his money to another investment.

He says he valued their expertise because he had previously dealt with them, so he took their advice.

"I agreed because I trusted the two gentlemen from the bank. I had a debit order for R25,000 to Unit Trust-Stanlib .

"They suggested that I cancel it and invest the money with Liberty Life for five years.

"They also advised me to invest R600,000 with Discovery Life for five years and R400,000 in gold shares for a year," Tshitema says.

Given that the Standard Bank employee had asked him to go to the branch to discuss the matter, Tshitema believed it was an investment product of Standard Bank.

Also, the fact that Mocwiri was employed by Standard Bank gave Tshitema the impression that he was acting on behalf of the bank.

Unbeknown to Tshitema he became a victim of a fraudulent scheme devised by an employee of the bank.

Tshitema became concerned when he realised he was not getting any information from the bank about his Growth Coin investment.

It later transpired that Tshitema's money was invested in a company belonging to Mocwiri and Dlamini and that all his money had been used.

Bam has now also brought a smile to this investor's face.

She has ordered Standard Bank to refund Tshitema the R400,000, with interest, that was fraudulently transferred to Mocwiri's account.

In determining Tshitema's case, Bam said Standard Bank had failed to put in place adequate systems to prevent fraud.

Comments

• Sign in or sign up to comment

Sat May 25 10:46:49 SAST 2013 ::

Jul 11, 2012

Mrazane

Some of these guys are so shady...stick with Alexander Forbes, Grey, Coronation or Legae Securities. Job well done Ms Bam
Report Abuse

Jul 11, 2012

7040360

true that Mrazane
Report Abuse

Jul 11, 2012

tpaz

Big monied people with lump-sums are targeted. Standard Bank/ABSA are making the most out of theses corrupt investment advisors -cum-sales people who after making a quick commission.

The bank should pay as in the case of a recent High court case, were ABSA was refusing to pay.
Report Abuse

Jul 11, 2012

Anti-rhetoric

Respect your money and do your research before any investment. Follow your gut feel as we say sometimes in Financial Management.
Report Abuse

Jul 11, 2012

Pointman

Most of the financial advisors out there are good but there are a few rotten ones giving the industry a bad name. Sharemax paid a whopping commission and some greedy advisors sold Sharemax to clients for the commission and not because it met their clients needs.
Report Abuse

Jul 11, 2012

Abdulla-Saleeh

@marzane: Clearly you not aware of the Alex Forbes scandal where they were pooling funds kept in a fudiciary capacity.

I also have a problem with most so called financial advisers that are mandated by one institution, obviously they would not point you anywhere even if their products are inferior.
Report Abuse

Jul 11, 2012

MicaParis

As a matter of concern, the Department of Trade and Industry through Comrade Rob Davies should review the law governing insurance in South Africa. The toxic avenger and the quagmire surrounding the financial justification and reasonability that the Insurance Companies are charging must be seriously be left under siege! How do you charge administrative and stationery fees at that excessive amount whereas the individual Insured does not get those services on daily sustainable basis. The amounts are too much excessive and must be controlled by the authorities not the Companies themselves because they can be very unreasonable. What this companies are doing tantamount to looting and an intelligent white collar organised crime which is regulated by the outdated Insurance Act that must be amended in the blink of an eye! The Act should state clear that an Insurance business must not be an ongoing concern but a charge per transaction in which all the expenses must be paid per service in a ''charge per service rendered'' method which will ensure that unnecessary looting corrupt excessive amounts are not drawn from the poor and marginalised. Or do we want to wake up to news that some Group CEO of these Companies are earning 10 million per month!! That is corruption and a serious mafia white collar crime that must be solved with immediate effect. We are tired of the rich stealing from the poor with the understanding that they have got no where to go. This matter must seriously be engaged!!
Report Abuse

Aug 29, 2012

Dieheart

@ Bloggers

What is your view or experience about investing in Redhotpenny shares. I have been thinking of doing it but somehow just can't bring myself to that.
Report Abuse

Aug 29, 2012

Dieheart

@ Bloggers

What is your view or experience about investing in Redhotpenny shares? I have been thinking of doing it but somehow just can't bring myself to that.
Report Abuse

Sep 21, 2012

Brighteyes

All financial advisers should remember that you should always give your client all the info and facts of bank products and other products outside the bank. Only then can the client make an objective decision of how he/she would like to invest. Try and put yourself in the clients shoes..... look at the picture from the other side of the table..... quite a different view... aint it??
Report Abuse

Read all 12 comments