The Capital Markets, Insurance and Savings Authority Supervisor, Amit Gal, today (Sunday) imposed a civil penalty totaling approximately NIS 2.3 million on “Almog Financial Solutions,” after they published and offered the public services for locating and withdrawing funds from pension funds, provident funds, and life insurance in exchange for hourly fees, despite not holding a license for pension consulting or marketing as required by law. This is the highest penalty imposed on a licensed dealer for extensive violations of the Pension Consulting Law.
The penalty, totaling NIS 2,305,200, was imposed on the dealer after between the years 2021 and 2024, they conducted transactions to redeem pension funds, provident funds, and life insurance for clients, despite not holding the required pension consultant or marketer license.
The dealer used to locate the funds, and then act on behalf of the clients with the institutional entities to redeem them. For this, they used to charge a commission of up to 20% of the amount redeemed through them. Following the redemption of funds before the legally permitted withdrawal date, clients paid high tax rates reaching up to 35%, in addition to the commissions charged by the dealer, thereby causing irreversible damage to their pension savings and insurance coverage in the pension fund.
The Consulting Law stipulates that a transaction for a client regarding a pension product may only be made as part of pension consulting or marketing. The law further stipulates that a person shall not engage in pension consulting unless they hold a pension consultant license, and in accordance with the license conditions.
The dealer’s advertisements offered services for locating and withdrawing funds from insurance companies. For example, in one advertisement, the dealer advertised: “Interested in redeeming funds that may be due to you in insurance, but afraid to take the first steps to do so?! Look, we know that bureaucracy can discourage almost anyone. In fact, we encounter people every day who have given up so many times on funds that are due to them simply because of the need to deal with endless forms. With us at Almog Financial Solutions – bureaucracy doesn’t break us! Efficiently, with extensive experience, and with great joy and a smile, we will help you redeem the funds, without you having to run around from place to place…”.
The Authority received information regarding the dealer’s activities alongside complaints about their operations. Following this, the Authority conducted an audit of the dealer, which revealed extensive violations of the law’s provisions, causing harm to members. A detailed report of the audit findings was sent to the dealer, and their owner was given a hearing. The Authority did not accept the claims raised in the hearing, according to which it was only a “fund locating” service, and determined that these were actions related to a pension product, requiring an appropriate license.
In light of this, the aforementioned penalty was decided, in the highest amount imposed on a licensed dealer for extensive violations of the Pension Consulting Law.
The Supervisor of Capital Markets, Insurance and Savings, Amit Gal: “The Authority will not relent in its tenacious fight against the improper phenomenon of encouraging clients to locate and redeem their savings, without an appropriate license, through manipulation and deception of clients, and without reflecting to them the risks involved. The law establishes necessary definitions for the protection of savers, and the Authority is committed to decisively enforcing these provisions. We view any violation of the law’s provisions with severity, especially given that the redemption of pension funds can lead to grave and irreversible consequences for the financial safety net of savers in old age.”
The Authority reminds that any person can obtain a full picture of their pension savings at a symbolic cost of NIS 14 through the Pension Clearinghouse. In addition, one can inquire where funds are managed in your name or in the name of a deceased relative free of charge, through the official “Hahar Kasef” (Heap of Money) website operated by the Capital Markets, Insurance and Savings Authority.
Related Topics
