FST upholds debarment of planner who signed advice records without meeting clients

A decision by the Financial Services Tribunal (FST) to uphold the debarment of a former Momentum financial planner serves as warning about the dangers of signing off on a record of advice (RoA) after a third party interacts with a client.

The central substantive issue in the reconsideration application was whether the actions of the planner and his employee constituted the rendering of “advice” as defined in the Financial Advisory and Intermediary Services Act.

Momentum’s case

In April 2025, Momentum Metropolitan Life Limited dismissed and debarred Stephanus Petrus Kloppers, who had been in Momentum’s employ for 18 years. The debarment stemmed from allegations that Kloppers failed to meet the fit and proper requirements, particularly those relating to honesty, integrity, and good standing.

Momentum alleged that Kloppers breached his fiduciary duties by allowing an unauthorised third party, identified as a “Mr WS”, to render financial services, signing RoAs without personal engagement and misrepresenting his involvement.

During an investigation following a complaint from Mr WS, Momentum’s forensics department discovered emails showing that Mr WS completed RoAs for eight clients, which Kloppers signed and submitted.

Momentum presented its findings at a meeting on 28 February. It said Kloppers conceded the investigation findings were correct and confirmed that Mr WS had rendered financial services.

Momentum formalised its position in the notice of intention to debar, stating that Mr WS had provided advice and/or assisted with intermediary services on Momentum Insure transactions. The notice asserted that Kloppers signed the RoAs as if he had rendered the services, despite not verifying their correctness or engaging with the clients, thereby earning commissions improperly.

Before the Tribunal, Momentum maintained that Kloppers’ signing of the RoAs without personal client interaction constituted misrepresentation. It argued that statements in the RoAs amounted to “advice” under section 1 of the FAIS Act, because they involved guidance on policy variations.

Applicants’ case against his debarment

In his response to the notice, Kloppers denied the allegations, specifically that he lacked honesty and integrity or was not of good standing, and that he breached his fiduciary duty or engaged in unprofessional conduct.

Kloppers said the meeting on 28 February was an “ambush”. The forensic investigator had predetermined that he was guilty and would be debarred.

He described Mr WS as a former, disgruntled employee appointed as a client liaison specialist in May 2024 to refer business for commission, including to MultiCare Financial Advisors (Pty) Ltd, of which Kloppers was a director.

Mr WS contacted existing Momentum clients to enquire about broker appointments or policy changes; if advice was needed, Kloppers would personally intervene. The summaries of advice reflected clients’ satisfaction with existing products and no desire for changes, which Kloppers maintained was factual and administrative, not advice. He signed them after satisfying himself no financial service was rendered.

Regarding the allegation of misrepresentation, he argued broker changes are common, and commissions were paid with Momentum’s knowledge of pre-existing products. He asserted neither he nor Mr WS rendered advice on those products.

A secondary charge was made against Kloppers at the disciplinary hearing: of sharing client information with a Momentum colleague, a “Mr MP”, without explicit consent. Klopper said the client sent his policy information to be reviewed, and there was implied consent to share the information with Mr MP because he was also employed by Momentum.

In his reconsideration application, Kloppers argued that:

• Momentum misinterpreted “advice” under the FAIS Act;
• failed to recognise that Mr WS had not given advice, per section 1(3)(a) of the Act; and
• even if his conduct was technically incorrect (which he denied), it did not demonstrate a lack of honesty, integrity, or good standing.

Tribunal’s analysis of the evidence and conclusions

The Tribunal examined the charges preferred against Kloppers in both the debarment process and the disciplinary hearing.

The FST assessed the transcript of the meeting on 28 February. It found that Kloppers admitted he did not know the clients initially and, at best, checked the RoAs and schedules afterwards. Kloppers did not specifically deny that Mr WS saw the clients and initiated the RoAs, although he disputed this was tantamount to rendering advice.

In evaluating Kloppers’ response to the notice of intention to debar, the Tribunal found that Kloppers’ submissions did not assist his case. Kloppers stated:

• Mr WS was contracted to refer business to MultiCare for commission;
• Mr WS interacted with clients leading to broker appointments and completed RoAs;
• Mr WS’s conduct was administrative and factual; and
• Mr WS recommended Klopper as a broker for advice on pre-existing products.

The Tribunal noted that Kloppers did not deny that he never interacted with or contacted the clients at the time of signing the RoAs.

Momentum contended that Kloppers signed RoAs specifically stating that clients were satisfied with their current cover and not interested in making any amendments. It referred to testimony by a sales executive at the disciplinary hearing to support its argument that taking over an existing policy and stating no changes are required constitutes advice. The Tribunal said this evidence did not assist Kloppers’ case.

The Tribunal said the facts supported Momentum’s version that Kloppers was not privy to conversations between Mr WS and the clients, nor did he contact them to introduce himself or discuss the content of the RoAs. It found that blank RoAs signed by clients were obtained by Mr WS, who inserted information, after which Kloppers signed them, misrepresenting that he had engaged the clients.

In one of the RoAs, Mr WS inserted “Client satisfied with current cover and premium, does not want to amend anything at this stage”. This, the Tribunal said, undermined Kloppers’ contention that Mr WS’s role was merely administrative and factual – a recommendation had been made in respect of a policy variation or non-variation.

The Tribunal said there were multiple instances where Kloppers appended his signature to the RoA without interacting with the clients about whether their cover was sufficient. This conduct was serious enough to impact his integrity and good standing, the FST said.

Regarding the secondary charge of sharing client information with Mr MP, the Tribunal rejected Kloppers’ contention that he could do so because Mr MP was employed by Momentum.

“An explicit or specific mandate was required from the data subject for applicant to share such personal information with other people. We are of the view that the applicant fell short of compliance with the relevant legislation,” the FST said.

The Tribunal found no reason to fault the debarment on the merits.

Kloppers also contested his debarment on procedural grounds, which were dismissed by the Tribunal in its decision delivered on 8 October.