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FAIS Ombud Dealing with complaints submitted to the Ombud for FSPs
A client complains to the Ombud about the poor performance of an investment fund due to negative global market conditions, not due to poor advice. Would the FAIS Ombud likely resolve this complaint?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Yes, all financial complaints are handled by the Ombud.
- b) Yes, if the client is over 60.
- c) No, the Ombud generally only handles complaints related to a FAIS breach (e.g., poor advice/conduct), not poor market performance.Correct
- d) Yes, if the FSP agrees to the resolution.
Why this is the answer
The Ombud's jurisdiction (Rule 4) is limited to resolving disputes where a client has suffered a financial loss due to a contravention of the FAIS Act (e.g., unsuitable advice, non-disclosure, negligence). The Ombud does not handle complaints about general market performance or investment returns if there was no fault on the FSP's part.
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