FAIS Ombud 2012/2013 Annual Report

The statistics section of the Ombud’s report provides useful insight into trends in the industry.

New complaints received
During the applicable year, the FSB received 9 949 complaints. The total number of complaints received which fall under the jurisdiction of the FAIS Ombud increased by just under 21% from 3 547 to 4 288. This makes up 43.1% of the total complaints received. Five years ago, this figure stood at 28.6%. This shows that more and more people are addressing their problems to the right forum.

Of the 9 949 new complaints received, 2 577 were dismissed and 4 366 were referred elsewhere, while 955 were settled in the year of receipt. 2 051 were carried over to the next year.

Total Complaints Resolved
During the 2012/2013 financial year, the office of the FAIS Ombud finalised a total of 9 033 cases from the current and previous years. Of these, 3 096 (34.3%) were dismissed, 4 550 (50.4%) were referred, 1 354 (15%) were settled and only 33 (0.37%) involved determinations.

One should not misconstrue the low number of determinations as being an indication that all is well in the industry. If one reads the actual determinations, it is evident that there is still a lot of ignorance concerning the real purpose of regulation, and how it should be applied in one’s daily dealings with clients.

Settlements versus Determinations
The 33 determinations were published during the course of the year, and most were discussed in our newsletters. It is interesting to note the vast number of settlements, compared to the actual determinations. There were roughly 41 settlements for every determination. The Ombud’s report contains eight examples of settlements on various grounds. We will discuss these in more detail in future articles in our newsletters.

In most of these examples, a lack of proper record keeping resulted in the respondents being unable to defend their actions. It is interesting to note that not only the advisor is at fault. There are instances where inadequate disclosure in the product provider’s documentation led to successful complaints by clients. This matter is currently under review as part of the proposed Retail Distribution Review.

The amounts involved in the examples varied between R10 000 and R597 100. The total amount of money flowing to clients from the actions of the Ombud came to R51 million for the 2012/2013 year alone.

Please click here to download a copy of the Ombud’s annual report.


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