The FAIS Ombud and Jaws

The worldwide outcry when a surfer in Australia or South Africa is attacked by a shark, never ceases to amaze and amuse me – the outcry, please note, not the attack.

Whether this is still the aftermath of the sixties horror movie Jaws, is hard to tell, but the media and the public have a morbid fascination with this headline subject. More newsworthy articles are often banished to page three in favour of what sells.

And Shark stories sell newspapers. (Not too sure about the rugby species, though!)

Which brings me to the FAIS Ombud, or more correctly, the office of the FAIS Ombud.

Not that I equate the Ombud with a predator, although there are some that see him or her as something to avoid at all costs.

What are the facts?

From the time the first determination was published in 2005, one got the impression that there was almost something sacred about every press release from the office of the Ombud. In all fairness, the late Charles Pillai was tasked with making rulings which would act as precedents in applying the new legislation, but then his flowery rhetoric and drama background made much more of the event than just a simple press release.

When one studies the latest annual report from the FAIS Ombud, the statistics tend to disprove the general sense of horror with which anything emanating from this office is viewed.

The growth in actual determinations is as follows:






















Although there was a dramatic increase in the number of determinations, this is hardly cause for alarm, when compared to the actual number of complaints received.

Another interesting aspect is that, despite increased public awareness, only 3550, or 35% of the complaints received in 2010/2011 were justiciable.

Of the 4394 cases referred elsewhere, only 4% were referred to the FSB.

Is that the theme song from Jaws I hear in the background?

What is far more interesting is the fact that 988 settlements were reached, compared to the 91 determinations. When one reads case studies published in the annual report, it appears that transgressors are often keen to settle, rather than go through a process where they have less of a say in the final outcome.

Whereas the fear factor may have influenced these decisions in the past, I am of the opinion that there is far greater awareness of the legal requirements as a direct result of the regulatory examinations. Acceptance, therefore, comes more readily, almost like a batsman who walks when he knows that he has nicked a delivery to slip.

I have the utmost respect for what the Office of the FAIS Ombud achieved under Ms. Noluntu Bam. She states in the preamble:

“Our aim was to drive in the best possible way towards attaining the organisation’s strategic goals. Chief of these is the improvement of the complaints-handling process for ensuring quicker and more cost-effective turnaround times and fairness in resolving complaints.”

A reshuffle in the office, and the departure of a staff member or two, has certainly done wonders for the productivity of this office, and we wish them all the best..

Their effective functioning plays an extremely important role in making the FAIS Act a GPS for the industry, rather than a siren warning against a possible shark attack.

The latter provides no guidance as to where the the danger lies that needs to be avoided.

We trust that sharing of information on both determinations and settlements will be more forthcoming in the year ahead.

Education contributes to prevention, which is in the interests of all.

This article was first published in the current edition of RiskSA magazine.

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