A broker’s statement that she was retiring did not become dishonest merely because she intended to continue broking under another financial services provider, the Financial Services Tribunal has found.
The Tribunal set aside her debarment, in a decision that draws a detailed distinction between genuine fit-and-proper misconduct and contractual, operational, or commercial grievances arising from a representative’s departure and subsequent competition.
The broker, Susanna Magdalena Laubscher, had been the key individual for NWK 4 Sure Brokers (Pty) Ltd’s medical scheme division and was also registered as one of the FSP’s representatives.
Laubscher’s contract of employment included a three-year restraint of trade prohibiting broker activities within 50 kilometres of NWK 4 Sure’s place of business, together with non-solicitation undertakings for the same period.
On 31 July 2025, she entered a supervision agreement with NWK 4 Sure and Catharina Magdalena Nel, under which Laubscher acted as supervisor and Nel as supervisee.
The events leading to the dispute began in September 2025, when Laubscher informed NWK 4 Sure that she would reach retirement age in November. She indicated that she was willing to continue providing services on a fixed-term basis.
According to the decision, a proposed change to the retirement age from 63 to 65 and a possible adjustment to her remuneration were under consideration. The contemplated fixed-term contract was not concluded.
On 11 November, Laubscher gave written notice of her retirement with effect from 1 December. She also indicated that she intended to continue working as a medical scheme broker under another FSP within the IP Brokers/Martiq environment. NWK 4 Sure regarded this as a competitor and considered the intended move to fall within the scope of her restraint of trade.
On the same day, Laubscher completed a quarterly fit-and-proper questionnaire. She answered “no” to a question asking whether she had demonstrated a lack of readiness and willingness to comply with legal, regulatory, or professional requirements and standards.
NWK 4 Sure contended that her retirement and intended departure created operational and regulatory risks during the annual renewal period, particularly for continuity of the KI function.
An urgent meeting was held on 19 November at which the KI’s statutory duties were discussed, and Laubscher was asked to provide a transfer plan.
On 25 November, she issued a notice to clients and advisers stating that she was retiring. Two days later, she released Nel from the supervision agreement and told NWK 4 Sure that a separate notice to the medical schemes had not yet been sent because she was awaiting the FSP’s approval.
On 28 November, NWK 4 Sure sent Laubscher a letter headed “Key Individual Duties and Functions – NWK4Sure Brokers Medical Aid Division”, accompanied by a chronological memorandum. NWK 4 Sure NWK relied on this letter as the notice triggering its debarment process.
Her retirement took effect on 1 December 2025. The change to her registration was effected on the FSCA’s records on 31 January 2026, and the debarment was recorded on 16 March.
On 1 April, the Tribunal chairperson suspended the debarment pending the outcome of the reconsideration application. The chairperson observed, on the limited material then available, that the grounds appeared to relate to contractual issues rather than fit-and-proper requirements.
The Tribunal said the suspension ruling was an interim measure and not determinative of the reconsideration.
Why NWK 4 Sure debarred her
NWK 4 Sure maintained that the debarment was based on conduct extending beyond an employment or contractual dispute. It argued that the fit-and-proper declaration, the release of the supervisee, and the alleged failure to hand over involved statutory and regulatory acts.
First, it accused Laubscher of deceiving clients by representing that she was “retiring” when she had already arranged to join a competitor. The FSP contended that this breached the General Code of Conduct and the honesty-and-integrity requirement.
Second, it alleged that she had abdicated her statutory KI duties and failed to carry out a proper handover of compliance matrices, client files, and advice tracks, exposing the FSP and the public to risk during the renewal period.
Third, NWK 4 Sure alleged that Laubscher had unilaterally and without authority released Nel from supervision shortly before her departure. It characterised this as an abuse of a statutory KI function.
The FSP also alleged that Laubscher had breached her restraint-of-trade and non-solicitation covenants and misappropriated client goodwill. It relied on the Tribunal’s January 2026 decision in TF Roos v Private Wealth Management and Other, in which the Tribunal dealt with client goodwill, relationships, and data belonging to an FSP.
Read: Transfer of client data justified debarment, Tribunal finds
NWK 4 Sure also relied on Laubscher’s negative answer in the 11 November fit-and-proper questionnaire as contemporaneous evidence of a lack of integrity.
Laubscher, in turn, argued that she had not received proper notice of an intended debarment, supporting evidence, or NWK 4 Sure’s debarment policy and procedure, and had not been given an adequate opportunity to respond to a formulated case.
On the merits, she contended that the complaints were in substance contractual, operational, governance, and commercial disputes arising from her retirement, intended competition, and NWK 4 Sure’s succession difficulties, rather than statutory grounds for debarment.
She also alleged that the debarment process had been used to resolve a post-employment and restraint-related dispute rather than to protect the public.
The central question
The parties waived their rights to a formal hearing, and the matter was decided on the documents.
The Tribunal first addressed jurisdiction and procedural compliance before turning to the central merits question.
Laubscher initially challenged NWK 4 Sure’s jurisdiction to debar a former representative but later abandoned that ground, accepting that section 14 of the FAIS Act permits such a debarment if the statutory requirements are met.
The Tribunal found that the applicable timing and knowledge requirements had been satisfied. But compliance with the six-month requirement was only a jurisdictional gateway: it did not establish a substantive ground for debarment.
The Tribunal also found that NWK 4 Sure’s 28 November letter did not comply with the debarment-notice requirements in section 14(3) of the FAIS Act. The letter dealt with Laubscher’s resignation, the transfer of KI responsibilities, operational consequences, restraint and confidentiality obligations, and reporting the matter to the authorities.
But it did not communicate an intention to debar her under section 14, identify a statutory basis for debarment, refer to the FSP’s debarment policy or procedure, or invite representations directed at a contemplated debarment.
The Tribunal found that the statutory safeguards were not satisfied. However, it went further: even if procedural compliance were assumed, it said, the debarment could not be sustained on the merits.
The central question was whether NWK 4 Sure’s allegations established that Laubscher lacked honesty, integrity, competence, or good standing, or had materially contravened the FAIS Act while acting as a representative – or whether they amounted, in substance, to contractual, operational and governance disputes.
In considering that question, the Tribunal drew on the meaning of honesty and integrity developed in Hamilton Smith & Company v The Registrar of Financial Markets and later Tribunal decisions including Ntongana v Standard Bank of South Africa Ltd.
It said integrity denotes sound moral principle, uprightness, and fair dealing, particularly in relation to truth. But two qualifications were important.
First, not every dishonest act justifies debarment: relying on Ntongana, the Tribunal said the conduct must be sufficiently serious to impugn a representative’s honesty and integrity.
Second, the conduct must engage the FAIS Act’s protective purpose of safeguarding the public rather than merely the FSP’s private interests. The inquiry was directed at serious regulatory misconduct, not ordinary contractual breaches or employer dissatisfaction.
At the same time, the Tribunal recognised that a commercial or contractual context does not shield genuinely dishonest conduct from debarment. In Roos, for example, the unauthorised transfer of confidential client information demonstrated a lack of integrity despite the contractual context.
Was saying she was ‘retiring’ deceitful?
The Tribunal considered NWK 4 Sure’s allegation that Laubscher misled clients by saying she was retiring while intending to join a competitor.
It found that the evidence did not establish dishonesty of the kind contemplated in Hamilton Smith and Ntongana.
The Tribunal found that Laubscher did retire from NWK 4 Sure with effect from 1 December 2025.
It also noted that NWK 4 Sure’s own documents showed that the proposed notice to medical schemes was never sent because it was awaiting the FSP’s approval.
“The respondent cannot rely on an unsent and unapproved draft as evidence of deception,” it said.
The Tribunal distinguished Roos. There was no evidence in Laubscher’s case of misappropriation of confidential client information or any false representation communicated to clients.
“At its highest, the complaint is that the applicant’s departure was commercially disadvantageous, which does not establish a lack of integrity,” it found.
Questionnaire argument was ‘circular’
The Tribunal was equally unpersuaded by NWK 4 Sure’s reliance on Laubscher’s answer to the quarterly fit-and-proper questionnaire.
It found that the argument assumed the very regulatory breach the FSP was seeking to prove and was therefore circular.
The answer fell short of establishing the deliberate dishonesty required under the principles in Ntongana, it said.
Handover and succession concerns
The complaints about the handover, absence of a replacement KI, and Laubscher’s refusal to remain on a fixed-term contract were, in the Tribunal’s view, operational and governance matters.
It pointed to the FAIS Act framework under which responsibility for maintaining an approved KI and supervision structure rests primarily with the FSP.
“Any shortcomings in succession planning do not establish dishonesty or a material contravention of the Act by the applicant,” the Tribunal said.
Nor did Laubscher’s refusal to sign handover notes constitute a fit-and-proper issue.
The Tribunal reached a similar conclusion about her release of Nel from supervision.
Whether the release was premature or procedurally irregular might at most raise a compliance issue. At its highest, the Tribunal said, it demonstrated a possible irregularity, not dishonesty or lack of integrity.
It also found that the evidence did not support NWK 4 Sure’s characterisation of the conduct as an abuse of statutory power, particularly because there was no evidence that clients had been exposed to unqualified or unsupervised advice.
Restraint and competition
The Tribunal turned to the alleged breach of restraint and Laubscher’s intention to compete.
It characterised these as contractual matters.
Although NWK 4 Sure relied on Roos, the Tribunal said that case turned on the unauthorised transfer of confidential client information, which independently demonstrated dishonesty. No comparable conduct had been established against Laubscher.
The principle in Roos that client goodwill belongs to the FSP might support civil proceedings, the Tribunal said, but without proof of comparable misconduct it did not constitute a fit-and-proper ground for debarment.
The Tribunal also drew on Maynard v Carrick Wealth (Pty) Ltd, which it said confirmed that contractual obligations do not immunise genuinely regulatory misconduct. But the converse was equally important: the existence of a restraint did not transform every competitive departure into a regulatory breach.
Referring to Masebe v Standard Bank of South Africa Ltd and FSCA guidance, the Tribunal said the debarment power could not be used to enforce contractual restraints or resolve commercial disputes.
NWK 4 Sure had argued that the conduct was regulatory because it concerned statutory obligations. The Tribunal rejected that reasoning: “That submission confuses the source of an obligation with the nature of the conduct,” it said.
Drawing on Ntongana and Associated Portfolio Solutions (Pty) Ltd and Another v Basson and Others, the Tribunal said the inquiry was one of substance and seriousness.
“Viewed in context, the conduct relied upon – the truthful retirement, an imperfect handover, a disputed supervision release, and intended competition – remains, in substance, an employment and contractual dispute rather than evidence of unfitness.”
What prompted the debarment
The Tribunal ultimately found that the record showed the debarment had been prompted principally by the consequences of Laubscher’s retirement and subsequent competition.
It identified the loss of a KI, succession difficulties, the supervision release, and the restraint as the matters driving the dispute, rather than a genuine concern for public protection.
Those matters might, if established, support contractual or employment remedies, the Tribunal said. But they did not establish that Laubscher lacked the fit-and-proper requirements or had materially contravened the FAIS Act while acting as a representative.
The Tribunal said this conclusion accorded with its decision in Mlombo v Standard Bank Financial Consultancy (Pty) Ltd, which recognised that debarment is a protective regulatory mechanism and not a means of suppressing competition.
It declined to send the matter back to NWK 4 Sure for reconsideration. The Tribunal said the six-month period prescribed for initiating the debarment of a former representative had since expired and, in any event, the defect was not merely procedural but substantive: NWK 4 Sure had failed to establish a lawful basis for debarment.
The Tribunal granted Laubscher’s reconsideration application and set aside the debarment recorded by the FSCA on 16 March 2026.
