FSB imposes R2.5 million fine on Discovery
Discovery Life has been issued with a R2.5 million administrative penalty by the Financial Services Board (FSB) for contravening section 3A of the General Code of Conduct for Financial Service Providers. The contravention pertains to Discovery’s recruitment of several financial advisers and the inclusion of sign-on bonuses. According to reports, the group finalised employment offers one day after amendments to section 3A of the code came into effect. According to the amendment, a Category I financial services provider authorised or appointed to give advice may not receive a sign-on bonus, and no person may offer or provide a sign-on bonus to any person as an incentive to becoming a Category I provider. A Discovery spokesperson has been quoted in the media as saying that while the paperwork in respect of the appointments was concluded post the publication of the regulations, the negotiations and process were done ahead of the deadline. Discovery has, however, reversed the payments made to the advisers as per the agreement with the FSB.