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New FAIS Ombud brings wealth of knowledge to oversight role in financial services

31 March 2010 The FAIS Ombud
Ms Noluntu Bam

Ms Noluntu Bam

Ms Noluntu Bam has been appointed by the Financial Services Board to take over from Charles Pillai as the Financial Advisory and Intermediary Services (FAIS) Ombud.

Pillai, the founding Ombud for Financial Services Providers, has been appointed by Finance Minister Pravin Gordhan as Pensions Funds Adjudicator.

Since inception of the Office of the FAIS Ombud, Bam has had a critical role to play in structuring the organisation from ground level. For the past three years in her role as Deputy Ombud, she has been responsible for many of the decisions that set the tone and direction of the institution that is already firmly established within the financial services sector.

“I am mindful of the fact that a lot more needs to be done. In the short time that the office has been in existence, my belief is that we have only scratched the surface,” said Bam.

She said many South Africans were still unaware of the existence of the FAIS Ombud. Each day consumers acknowledged they had only just become aware of the dispute resolution institution.

“I am humbled by the appointment and thank the Board of the FSB for its confidence in my ability for the mammoth task of leading this institution. From here I can only grow.

“I am thankful for having a formidable team of professionals who are committed to the cause of protecting consumers and strengthening the integrity of the financial services industry.

“We all take the mandate and its implications very seriously. This makes my life easy because I go to bed every day with an assurance that I have made a difference in the life of the ordinary South African.”

Bam is a qualified lawyer and holds a B Proc, LLB and LLM degrees with specialisation in Income Tax Law, is a CFP, and is currently reading towards an MBA with Wits Business School.

Since inception until 2009/9, the FAIS Ombud has handled 22 030 complaints and enquiries from aggrieved financial services consumers involving total monetary compensation of
R64 075 798.

On 21 July 2005, a ground-breaking determination upholding the rights of all consumers in the case of Helene Dennis versus Nedbank Group Insurance Brokers and Another was made, when the Ombud ordered the respondents to grant free choice to its consumers in respect of homeowner’s insurance cover.

This determination prompted a change to the National Credit Act 2005 (No 34 of 2005), which now includes a section allowing free choice.

Other errant practices involving the failure to conduct proper needs analysis or to record the advice given resulted in further determinations against the larger banks.
A high profile financial services provider was also found to be wanting when it came to honesty and integrity when he relied on forged documentation to file a claim for fees. The ruling led to his subsequent disbarment.

Pronouncements on financial scams and schemes that skirted regulatory oversight drew public attention to these kinds of practices thereby alerting consumers to be vigilant to such practices.

Over the years there were several other landmark determinations.

The quantifiable amount of cases settled or determined was R 6 500 000 in 2005/6 and rose to R32 916 192 in 2008/9. Increase in determinations for the same period was from 9 to 21.

Quick Polls

QUESTION

Financial behaviour experts suggest that today’s risk modelling methodologies ignore your client’s emotional ability / behavioural capacity. What are your thoughts on spicing up risk profiling tools to make allowance for your client’s financial behaviours

ANSWER

[a] Bring it on; my client’s make too many irrational financial decisions
[b] Existing risk profiling tools are adequate
[c] Risk profiling tools should be based on the model / rational client
[d] The perfect risk profiling tool is science fiction
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