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Record of Advice template for South African insurance brokers

A Record of Advice (ROA) is the FAIS-required record of the advice you gave a client and why it suits their needs. Below is what the Code asks an ROA to contain, a free short-term personal-lines template, and how Broker AI drafts one from a policy document for you to review.

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  • Download the Record of Advice template (.docx)

    Sections A–G: client and adviser details, needs, information relied on, products considered and the recommendation, disclosures, the section 9(1)(d) replacement comparison, declarations. Each heading names the Code provision it discharges (BN 80 of 2003 as amended to June 2020).

What a FAIS Record of Advice must contain

Section 9(1) of the General Code of Conduct for Authorised Financial Services Providers says the record must reflect the basis on which the advice was given, and in particular must contain four things:

  1. 01A brief summary of the information and material on which the advice was based.
  2. 02The financial products that were considered.
  3. 03The financial product or products recommended, with an explanation of why the product selected is likely to satisfy the client’s identified needs and objectives.
  4. 04Where the product recommended replaces one the client already holds: a comparison of the two — fees and charges, special terms, exclusions, waiting periods, loadings, penalties, excesses and restrictions — and the reasons the replacement is more suitable than keeping or modifying the existing product (section 9(1)(d)).

Free Record of Advice template (short-term personal lines)

Use these five sections as the skeleton of an ROA that covers what the Code asks for. Each maps to a requirement above. The Word download at the top of this page has the same five sections as fillable tables, plus the replacement comparison section 9(1)(d) requires and the declarations.

A

Client & adviser details

Client name and contact details, the FSP and representative name, FSP licence number, and the date of advice.

B

Needs & objectives identified

The cover the client needs — e.g. buildings, household contents, motor, all-risk — and the sums insured discussed, based on the information the client provided.

C

Information the advice was based on

A summary of the client’s circumstances, risk profile, affordability and any material information used to form the recommendation.

D

Recommendation & motivation

The product(s) recommended, the insurer and premium, and a clear explanation of why the recommendation meets the client’s identified needs and objectives.

E

Disclosures & client confirmation

Average/underinsurance warnings, excess structure, replacement implications, and confirmation that values were agreed with the client.

How to write section D so it survives a complaint

Section D is the one that is read first and written worst. A motivation that says "the client required household cover and this policy provides household cover" restates the need rather than answering it. Each sentence should join a need you identified in section B to a feature of the product you recommended, and say why that feature answers it:

  1. 01Name the need, in the client’s terms — "cover for a home office with R 180,000 of equipment the client works from daily".
  2. 02Name the feature that meets it — "the wording extends business equipment at the insured address without a separate all-risk section".
  3. 03Say why that matters against the alternatives you looked at — "the other quoted policy required the equipment to be specified and charged a separate excess".
  4. 04Where you recommended less than the client asked for, or more, say what drove it — affordability, a risk they had not considered, an exposure they wanted to carry themselves.

Sums insured are the client’s figures — the explanation is yours

On a personal-lines ROA the values almost always come from the client: what the contents are worth, what the building would cost to rebuild, what the jewellery is worth today. That does not make the figure the client’s problem alone. The adviser’s duty is to explain what the figure has to represent, that the average condition reduces a partial-loss payout in proportion to any shortfall, and to record that both things were said. The defensible line is "the client confirmed contents at R 850,000 and was advised that averaging applies if the actual value at risk is higher" — not a number in a box.

The three things most often left out of a completed ROA

Files are rarely missing the recommendation. They are missing the surrounding facts that let somebody else read the recommendation years later:

1

The products NOT recommended

Section 9 asks for the products considered, not only the one sold. Two lines naming the alternatives and why they were set aside is the difference between a choice and a sale.

2

The date of advice

Distinct from the inception date and the date the client signed. When the file is read after a claim, the date of advice is what fixes what you knew at the time.

3

Who actually advised

The representative’s name and the FSP licence number, not just the brokerage letterhead — the register of representatives is what a supervisory visit reconciles the file against.

When you owe a new Record of Advice

An ROA records the advice given on a date. Whenever advice is given again, there is another record to make — and the most common gap in an otherwise tidy file is a year of mid-term changes with nothing written down:

  1. 01A mid-term amendment that changes cover: a vehicle added, a sum insured raised, a section removed.
  2. 02A renewal where the sums insured, the risk or the client’s circumstances have moved — or where the renewal goes to a different insurer, which makes it a replacement and brings the section 9(1)(d) comparison with it.
  3. 03Any conversation in which the client asked for a recommendation and got one, whatever the channel — a phone call and a WhatsApp exchange are both advice.
  4. 04A review that concluded nothing should change. That is still advice, and a dated note recording it is what shows the review happened.

Where the template stops and the file begins

The template is the advice record, not the whole file. Around it belong the needs analysis it draws on, the disclosure document the client received, the quotes or comparison you relied on, the policy wording and schedule as issued, and any note of information the client declined to give. Section 3(2) of the General Code of Conduct requires advice records to be kept for five years, running from the termination of the product or the rendering of the service — so the retention clock on a long-standing household policy has not started yet. Keeping the set together and searchable is what makes a five-year-old file quick to answer from.

Draft a Record of Advice from the policy documents

Filling this in by hand for every client is where the hours go. Broker AI reads the policy wording and schedule you upload, extracts the cover and sums insured, and drafts a Record of Advice laid out around section 9 of the Code, for you to review and finalise. Purpose-built for South African brokers.

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Frequently asked questions

Is a Record of Advice a legal requirement in South Africa?
Yes. Under the FAIS General Code of Conduct, a financial services provider must maintain a record of the advice furnished to a client that reflects the basis on which the advice was given, including the information relied on and the products recommended.
What is the difference between a Record of Advice and a needs analysis?
A needs analysis captures the client’s circumstances, objectives and risk profile. The Record of Advice documents the advice itself — what was recommended and why it meets the needs the analysis identified. In practice they are completed together.
How long must a Record of Advice be kept?
Five years. Section 3(2) of the General Code of Conduct requires advice records to be kept for five years after the product terminates or the service is rendered. Keeping them in a searchable system rather than loose documents makes retrieval and audits far easier.
Can I generate a Record of Advice automatically from a policy document?
Yes. Broker AI reads the policy wording and schedule you upload, extracts the cover, sums insured and material terms, and drafts a Record of Advice for you to review and finalise. The draft is a starting point; the advice and the sign-off stay yours.
How much detail does the motivation need?
Enough that a reader with only the ROA can follow the recommendation: the need in the client’s terms, the feature of the product that answers it, and why that beat the alternatives you considered. Restating the need in product language is the most common weakness.
Do I need a new Record of Advice for a mid-term change?
If the change is advised — a vehicle added, a sum insured raised, a section dropped — then advice was given and there is a record to make. An administrative change the client instructed without advice is not the same thing, but the file should show which it was.
Does a phone call or WhatsApp conversation count as advice?
The channel does not matter. If the client asked for a recommendation and got one, that is advice under FAIS and it needs a record — which is why a short dated note written the same day is worth more than a perfect document written from memory later.

This page is general information about FAIS record-keeping, not legal or compliance advice.

Sources

  1. 01General Code of Conduct for Authorised Financial Services Providers and Representatives, Board Notice 80 of 2003 as amended to Board Notice 706 of 26 June 2020 — sections 3(2), 8 and 9 (consolidated text hosted by Masthead)
  2. 02Financial Advisory and Intermediary Services Act 37 of 2002 — section 18, Maintenance of records