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FAIS Ombud Dealing with complaints submitted to the Ombud for FSPs
A client complains to the Ombud that their investment fund lost value because of a global market downturn — there is no allegation of poor advice or misconduct. Will the Ombud generally resolve it?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) No — the Ombud deals with FAIS breaches such as poor advice or conduct, not ordinary market losses.Correct
- b) Yes — the Ombud resolves every financial complaint a client raises.
- c) Yes — provided the client is over 60 years of age.
- d) Yes — but only if the FSP consents to the Ombud’s involvement.
Why this is the answer
The Ombud's jurisdiction is about loss caused by a contravention of FAIS (e.g. unsuitable advice, non-disclosure, negligence). A loss arising purely from market performance, with no fault by the FSP, falls outside that mandate. Age and FSP consent are irrelevant to jurisdiction.
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