The Complainant stated that he retired in 2018 and purchased a Life Flexible Annuity through the Respondent in 2020. He later faced financial hardship and requested to withdraw the full annuity but was denied due to legislative restrictions.

During the complaint investigation, the Office had to determine whether the Respondent failed to disclose the withdrawal limits and whether the absence of a revised Record of Advice (ROA) made the product unsuitable. Under the FAIS Act, especially Sections 2, 7(1)(a)-(c), and 8 of the General Code of Conduct, financial service providers must act honestly and diligently and provide full disclosure to enable informed decisions.

The Office found that whilst the annuity met the Complainant’s retirement needs, the adviser violated their duty by not revealing the restrictions. As a remedy, the Respondent refunded R29,223.77 in advice fees, which the Complainant accepted.

The Office concluded that the product could not be cancelled and that the compensation offered was fair and reasonable given the circumstances.