Global Ombud told of impact of SA’S FAIS Ombud
Financial Services Ombuds from around the world have been told about the significant impact made by South Africa’s Financial Advisory and Intermediary Services Ombud on the local financial services landscape.
Charles Pillai, the Pretoria-based FAIS Ombud, told delegates attending the Annual Conference of the International Network of Financial Services Ombudsman Schemes in Dublin, Ireland, this week that his determinations were deemed to be judgments of the court.
“Just like judgments of a court record the names of the parties to the dispute, we have to do likewise.
“The fact that determinations are published, with the names of the parties involved, means that they are reported on in the financial and other media.
“In this respect we may be different from many schemes which quietly settle a matter between the parties, without naming and shaming anyone. And this is where, I believe, our greatest impact lies.”
Pillai said the likelihood of determinations being published was a real deterrent.
“Once issued, our determinations are placed on our web-site, as is done in respect of judgments of courts, including the Constitutional Court.
“The very real fear that inappropriate conduct might be splashed across the morning newspaper has been conveyed to us by many a compliance officer.”
Pillai said transparency was vital to the restoration of public confidence in the financial services industry.
“For too long questionable industry practices, dubious products, and conflicts of interest have characterised the industry.
“A good example of this is perhaps the Madoff Ponzi scheme. There are now questions as to whether Madoff’s reputation and relationship with regulators helped him to continue with the scheme.
It comes as no surprise to learn that Madoff sat on the Securities and Exchange Commission's advisory committee and was chairman of the Nasdaq Stock Market.”
Pillai gave several examples of cases that he had determined on and the impact the rulings had made. This included the notorious Leaderguard case in which South Africans mostly lost some R385 million rand through investment in what can be described as a an outright scam.
Earlier, Joe Meade, Ireland’s Financial Services Ombud, said: “In these turbulent financial times, the Financial Services Ombudsmen worldwide play a crucial role in ensuring that Complainants, who feel they have not been treated properly or have been mis-sold products, have an alternative out-of-court and speedy resolution process available to them.
“Since we last met in New York in September 2008, the landscape of the financial services sector has changed dramatically. In that regard, we hope that this conference will refocus us all as to what we are about and help to ensure that the role of the Financial Services Ombudsman is fully appreciated.”
