The Financial Services Tribunal (FST) has dismissed a reconsideration application by a financial adviser, finding that undisclosed personal payments from a client, a beneficiary nomination, and inaccurate honesty-and-integrity declarations were sufficient to justify Liberty’s conclusion that he no longer met the fit-and-proper requirements.
The Tribunal also attached significance to the adviser’s role as a key individual, saying such a person is expected to understand conflicts of interest and disclosure obligations and cannot plausibly claim ignorance of their regulatory implications.
The decision turned on two related but distinct issues: a disputed forgery allegation and, separately, the adviser’s failure to disclose personal interests and payments.
The decision shows that conflict and disclosure breaches can justify debarment even where a more dramatic allegation (forgery in this case) is not finally resolved. It also shows the importance of treating honesty-and-integrity declarations as substantive compliance documents, not administrative formalities.
Liberty’s allegations
Liberty’s case against Michael Lawrence Andrew had three strands.
First, it alleged that Andrew was nominated as a beneficiary under a Liberty policy held by the deceased, with an approximate value of R1.5 million, and that the signature on the beneficiary nomination form was forged.
Second, it said the beneficiary nomination itself created a conflict of interest that had to be disclosed under the FAIS framework and Liberty’s internal policies.
Third, it alleged that Andrew received two cash payments of R100 000 each from the deceased in 2023 and 2024 (with Liberty also referring to an additional R10 000), and that these payments were not disclosed as required. Liberty said the non-disclosure of those payments reinforced its conflict-of-interest and honesty concerns.
At the internal inquiry, Liberty relied on a handwriting expert report prepared by ReBel Documents, which concluded the signature on the beneficiary nomination form was forged and excluded the deceased as the author of signatures appearing on disputed beneficiary and related documentation.
The adviser’s case
Andrew denied that any signatures were forged and produced his own handwriting expert report by Cecil Greenfield, which concluded the disputed signatures were authentic.
Andrew also contested Liberty’s inference of impropriety regarding the payments. He accepted that he received the two R100 000 payments but said these were voluntary and arose in the context of a personal relationship and were not unlawful or indicative of dishonesty.
At the Tribunal hearing, Andrew applied to place supplementary evidence before the Tribunal, including a second Greenfield report based on original signature specimens that were said not to have been available during Liberty’s inquiry. Liberty did not oppose the admission of that supplementary material, and the Tribunal admitted it.
Andrew did not dispute that the payments were not reflected in his honesty and integrity declarations, and he conceded that his nomination as beneficiary was similarly not reflected. His case was that the beneficiary nomination had not been concealed but had been processed through Liberty’s systems, that the payments were voluntary rather than improper, and that the forgery allegation could not properly be resolved in Liberty’s favour based on competing expert reports alone.
No oral evidence, no cross-examination
A feature of the record was that no oral evidence was led before the inquiry adjudicator. Neither handwriting experts nor factual witnesses testified, meaning the adjudicator determined the dispute on documentary material and written representations alone.
The adjudicator accepted the ReBel report, rejected Andrew’s expert evidence, and made findings that the signatures were not authentic and that documentation had been forged, attributing responsibility for the forgery to Andrew.
Caution on forgery allegation, but …
In its analysis, the Tribunal acknowledged that forgery allegations strike at the core of honesty and integrity in the FAIS framework.
However, the Tribunal held that the adjudicator could not properly make the definitive forgery findings, given the inquiry proceeded without oral evidence and the competing expert opinions were not subjected to cross-examination. The dispute on authenticity therefore rested on “mutually destructive” expert reports, a basis the Tribunal considered insufficient for definitive findings of forgery in those circumstances.
That did not end the matter. The Tribunal said the debarment decision did not depend exclusively on a finding of forgery. Even if the signature dispute were left unresolved – or resolved in Andrew’s favour – the Tribunal said there remained facts bearing directly on Andrew’s fitness and propriety under FAIS.
Those facts, the Tribunal said, included Andrew’s acceptance of personal payments from a client whose investments he administered, his nomination and acceptance of nomination as beneficiary under the deceased’s policies, and his failure to disclose these arrangements through Liberty’s prescribed compliance structures.
Why the conflict issues were central
The Tribunal emphasised that proper disclosure and management of conflicts of interest lie at the heart of fiduciary obligations imposed on representatives and KIs in the financial services industry.
It treated the conflict issue as independently sufficient to sustain the debarment. On its analysis, Andrew accepted personal payments from a client whose policies he administered, accepted nomination as beneficiary under that client’s policies, and failed to disclose those arrangements through Liberty’s compliance structures.
The Tribunal’s reasoning on conflict rested on a combination of the existence of personal interests and the manner of disclosure – or lack thereof – through prescribed structures.
On Andrew’s own version, the Tribunal noted, he accepted nomination as a beneficiary under policies belonging to a person who remained his client, and he accepted substantial personal payments from that client. The Tribunal treated these as personal financial interests that required transparency and compliance oversight.
Although Andrew contended the payments were eventually disclosed during the forensic investigation, the Tribunal stated it was common cause that the beneficiary nomination itself was never disclosed through Liberty’s prescribed compliance structures.
The Tribunal also highlighted Andrew’s own indication that he understood the beneficiary nomination created a conflict requiring disclosure. It referred to an email where Andrew said the nomination “bothered” him and that he raised the issue with management, and it noted he later accepted Liberty was correct to regard the arrangements as a conflict that “should have” been disclosed.
The Tribunal also relied on Andrew’s annual honesty-and-integrity declarations. It found that his statements that he had disclosed gifts or benefits were false and misleading, which compounded the underlying conflict-of-interest problem.
Why KI status mattered to the Tribunal
The Tribunal treated Andrew’s KI status as an aggravating feature.
It said a KI is expected to understand conflicts of interest, appreciate the importance of disclosure, and uphold compliance culture, so Andrew could not plausibly claim ignorance of the regulatory significance of receiving undisclosed personal benefits.
The Tribunal concluded that Liberty was entitled, on the available facts and information, to find that Andrew no longer satisfied the fit-and-proper requirements relating to honesty, integrity, and good standing.
It consequently held that Andrew had not made out a case for setting aside the debarment decision, and it dismissed the reconsideration application.
