“Double your money in a couple of weeks in a bank-guaranteed investment.” This is what former Hartbeespoort financial adviser Jan Swanepoel told his Pretoria client Johannes Snyman, who had been paid out R300 000 from a dread disease assurance claim after a heart attack.
But on the maturity date three months later, Snyman received no return and no capital – and he has still not received a cent.
And after falling prey to the empty promise of “a guarantee”, Snyman sealed the transaction equally dangerously by paying the R300 000 into the bank account of one of Swanepoel’s employees, Frik van Rensburg.
In a recent determination, financial advice ombud Noluntu Bam ordered Swanepoel and his company to repay Snyman the R300 000 plus interest at the penalty rate of 15.5 percent a year from December 1, 2009.
Swanepoel had been advising Snyman for about nine years, first as a bank broker and then as an independent adviser, operating under the name of Souvenir Finansiele Dienste. The company was deregistered as a financial services provider in 2011.
The financial magician who could achieve the promised return for Snyman was Attie van Deventer, who, supported by Swanepoel, told Snyman his investment was in a “bank-guaranteed” investment. The investment was supposedly in “offshore guarantees in capital projects”.
Van Deventer was replaced by Gerrie Nel, who, Snyman was told, would “take over Van Deventer’s investments and would provide guarantees to investors”.
About 13 weeks after making the investment in December 2009, Swanepoel assured Snyman that his money was safe. But by July 2010, Swanepoel claimed he had called in the elite police division, the Hawks, to investigate. In August 2010, however, Swanepoel told Snyman he would get his money back and claimed that Van Deventer had paid the full R600 000 to Nel.
Bam determined that:
* Swanepoel, by his own admission, did not have the knowledge, skills and experience to advise Snyman appropriately on the investment.
* The “bank-guaranteed” investment was not regulated and therefore offered investors no protection. Bam says the mere suggestion that capital invested could be doubled in a matter of weeks should have dissuaded Swanepoel from advising Snyman to invest money with Van Deventer.
* There is no indication that Swanepoel conducted a due diligence to establish in which assets the company invested, the financial fitness of the company and the viability of the product offered.
* Swanepoel was not only reckless when he invested Snyman’s funds in a product about which he knew little or nothing, but he also violated the Code of Conduct under the Financial Advisory and Intermediary Services Act, which requires an adviser to act with due skill, care and diligence and in the interest of clients.
* Swanepoel failed to provide the ombud with a record of the advice he had given Snyman.