Question:
Do you know SDL Financial Services (www.sdl-groep.co.za)? They do "network marketing", but it looks like a pyramid scheme. A subscriber pays R170 a month for funeral and personal accidental benefits but also receives a kickback on generations of your referrals that subscribes to the scheme. There are also other benefits like a reward card and a loyalty program. Can you please comment?

Answer:
I submitted the query to the Financial Services Board (FSB) and they said that the company is a registered FSP (financial services provider) with the FSB. After going to their website and reading about the way it is marketed, these individual are not doing anything to contravene the FAIS Act.

The reason I say this is because their clients are not marketing or selling the product or giving any advice on the product of the company. Instead all they are doing is a pure referral and there is nothing in the act the prohibit this type of marketing.

However, if you believe it be a pyramid scheme then you can report them to the dti (Department of Trade and Industry).

Maybe the directors were members of Amway or some other network marketing scheme and decided this would be a good way to market their services. As long as they don’t expect members of the public to actually sell the services, they should be above board.