Fred Andalaft, founder of Affinity Business Network, previously faced an investigation by South Africa's Financial Services Board (FSB) in 2008 for his role in Progressive Investment Trust. The probe uncovered R100 million, or approximately $6.1 million USD, in investor losses and allegations that Andalaft repeatedly tried to mislead financial inspectors.
The FSB launched its investigation into Progressive Investment Trust after the liquidator of the Fraser Lesotho Pension Fund attempted to withdraw investments from Progressive Asset Management. The liquidator encountered significant resistance, prompting the regulatory body to intervene. Andalaft, also known as Freddie Andalaft, claimed the funds had been repaid to the pension fund. Regulators found this claim to be false.
The investigation expanded to cover all Progressive Trust companies. Inspectors determined that Andalaft was the "directing will and mind" behind these operations. They noted his consistent efforts to provide false information to the FSB. As the probe continued, Andalaft informed consultants of the SA Studbook Provident Fund that they could not withdraw money, citing the ongoing FSB investigation as the reason.
Curators took control of the Progressive Trust companies by the end of May 2008. By the close of that year, the companies were ordered into liquidation. The investigation revealed operating losses with no actual investment growth. Funds meant for investors were instead raided to cover shortfalls. Details regarding this case ceased to be publicly available after 2018.
Affinity Business Network's website, "affinitybn.co.za," offers no information about its ownership or leadership. The domain was registered on June 6, 2016, by "affinitybn" and lists an address in Gauteng, South Africa. Fred Andalaft identifies himself as the founder on his LinkedIn profile, but this information is absent from the company's official site. His public background before Affinity Business Network appears limited to a single marketing interview.
The company operates within the insurance multi-level marketing (MLM) sector, claiming to distribute "the fastest growing medical health insurance products in South Africa." Affinity Business Network describes itself as a distributor for "Affinity Enterprises and its affiliated partners," with Affinity Health positioned as a leading provider of affordable medical and health insurance products in the South African market. However, the Affinity Health website does not display specific plan information or pricing details.
Affiliates of Affinity Business Network earn commissions on health insurance premiums. They receive direct commissions from the premium cost and residual commissions through a unilevel structure. To qualify for these MLM commissions, an affiliate must sell three new insurance policies each month.
Retail and recruitment commissions are paid as a percentage of insurance premiums generated by both retail customers and recruited affiliates. The commission rate scales with the premium cost: 1% for premiums up to R10,000 ZAR, 2% for R10,001 to R20,000 ZAR, 3% for R20,001 to R30,000 ZAR, 4% for R30,001 to R40,000 ZAR, and 5% for premiums exceeding R40,000 ZAR.
Residual commissions extend three levels deep in the unilevel structure. Level 1, consisting of personally recruited affiliates, pays 50% of the first premium payment and 2.5% on subsequent payments. Level 2 pays 1.5% of premiums, and Level 3 pays 1%.
Team Bonuses allow affiliates to earn beyond the initial three levels. These bonuses require affiliates to achieve ranks from 1 Star to 5 Star by generating specific team points for three consecutive months. For example, 2,000 points are needed for 1 Star, escalating to 10,000 points for 5 Star. Once attained, rank qualification is annual. Team points are calculated by multiplying an affiliate's personal referrals by the premium volume from their downline referrals. The company does not disclose specific premium prices or point values. Affiliate membership costs R295 ZAR, roughly $21.50 USD.
The lack of specific policy information from Affinity Business Network creates a significant transparency issue. This absence makes it impossible for potential customers to evaluate the insurance products or compare them with offerings from other providers. Typical insurance providers offer detailed plan information and online estimates, a competitive disadvantage for Affinity Business Network affiliates. The way the compensation plan combines commissions for retail sales and personally recruited affiliates also raises questions about whether the primary focus is on product sales or recruitment. If most premium holders are affiliates, the structure more closely resembles a pyramid scheme. Consumers considering Affinity Business Network should directly ask prospective uplines about their ratio of retail premiums sold versus premiums from recruited affiliates. The Financial Sector Conduct Authority, the successor to the FSB, maintains strict guidelines on financial product transparency and ethical business practices.