An intermediary’s take on dispute resolution
The dispute resolution schemes that ingrained in South Africa’s financial services sector offer a safety net for consumers while serving as a much-needed safeguard for their fair treatment at the hands of financial services providers (FSPs).
Advisers and brokers are already familiar with the ombud scheme landscape, but it took an unscripted conversation at the Financial Intermediaries Association of Southern Africa (FIA) Advice Summit 2025 to help reframe their often-negative perceptions.
A misleading title
Ronald King, FIA President and Head of Public Policy at PSG Wealth, took to the podium to interrogate Leanne Jackson, CEO of the Ombud Council, and learn more about how the various statutory and voluntary ombud schemes fit into the domestic financial services landscape. “The Ombud Council is a body that oversees the Ombud schemes,” said Jackson. She added that her legislative title of Chief Ombud was somewhat misleading, and that the council was not directly involved in dispute resolution.
Ther Ombud Council oversees the voluntary financial sector ombud schemes that have recently consolidated under the National Financial Ombud (NFO) and two statutory schemes, namely the FAIS Ombud and Pension Funds Adjudicator (PFA), plus the JSE Ombud. “We do not deal with complaints; people who are unhappy with an ombud scheme decision cannot escalate it to us,” Jackson explained. “But if a scheme applies inappropriate processes, breaches their own governing rules or the legislation that governs them, we have oversight.”
The assembled financial intermediaries were reminded that statutory ombud scheme decisions have the status of a court judgment, and that NFO decisions are fully binding on firms due to their commitment to, and compulsory participation in, the dispute resolution structures. King asked how financial services providers might escalate matters if an ombud came back with an unfavourable decision. In the FAIS Ombud and PFA space, respondents can turn to the Financial Services Tribunal while the NFO operates its own independent appeals tribunal.
Human differentiators in advising
The reframing mentioned in the opening paragraph revolves around the empathy, relationships and trust that most advice professionals acknowledge as key differentiators in financial advising. “The ombud system offers your clients, and hence you, an accessible, independent dispute resolution system,” Jackson said. She talked up the ombud schemes as value-adds for when things go wrong in the adviser-client context, and a great source of information about common challenges and complaints trends in financial services.
“The ombud system is treating customers (TFC) in practice,” the Chief Ombud said. “Each ombud scheme has an equity mandate over and above having to look at the letter of the contract and the law.” Your writer agrees in principle, but it is worth commenting that many contentious dispute rulings arise from fast-and-loose equity-based rulings. King also pushed back on this, asking whether the ease of access to ombud schemes was perhaps making it too easy for consumers to escalate disputes. He also questioned the perception that the system favoured complainants over intermediaries.
Pushing for pre-ombud resolution
“The ombud schemes absolutely do not hate the intermediary,” Jackson retorted, offering a range of statistics to support her statement. In the latest year, the Fais Ombud, NFO and PFA dealt with approximately 50000 complaints and compensated consumers to the tune of R457 million.
Of this total, some R32 million arose from FAIS Ombud rulings against financial services providers (FSPs). Jackson noted that only 25% of formal complaints handled by the FAIS Ombud were decided in favour of the consumer. In an interesting twist, the Chief Ombud revealed that 63% of so-called premature complaints (referred back to FSPs) were resolved for the client.
The FIA President then asked how advisers or brokers should respond when receiving notification of a complaint from an ombud scheme. Jackson encouraged FSPs to cooperate with the request and subsequent investigation, reminding them that the ombud schemes were formal structures designed to deal with serious matters. Prevention is better than cure, so it makes sense for advisers and brokers to pay attention to record keeping and the other requirements set out in the Financial Advisory and Intermediary Services (FAIS) Act and its accompanying codes.
The value in sound record keeping
If you keep your record of advice and decision making accurate and up to date, then you have a clear edge in defending against allegations of wrongdoing. Another great piece of advice is to stay calm through the process. Jackson suggested that it was far better dealing with a breakdown between adviser and client in a formal dispute resolution process than having the disagreement aired in the courts or, even worse, over social media. A mature approach is indicated even when facing the most extreme examples of miscommunication or unfair apportioning of blame between FSP and product supplier, typically where complaints migrate from insurance ombuds to FAIS.
Although Jackson refrained from commenting on specific FAIS Ombud rulings, she noted that advisers who consistently act in their clients’ best interests are unlikely to run into trouble. Ombud schemes assess matters objectively, asking whether the respondent did what a reasonable professional would have done under the circumstances. Advisers should provide appropriate advice, communicate clearly, ensure clients understand both the process and the recommended solution, and keep evidence of the steps taken throughout. Caveat emptor has no place in a TCF environment; advisers cannot rely on small print or technical contract wordings as a defence.
Not much COFI to see here…
King could not resist a question about legislative inertia, asking what the delay in signing off on the long-awaited Conduct of Financial Institutions (COFI) Bill meant for the future of South Africa’s ombud system. He wondered what changes might lie ahead for the Ombud Council, and whether reform was still on the cards. Jackson responded that “the COFI Bill itself is not going to change a heck of a lot in terms of the schemes as you know them now.” It would, however, lead to the filling of existing gaps as the FSCA’s conduct remit expanded to include activities such as debt collection and payments.
She noted that the next phase, once COFI is enacted, would involve work behind the scenes work on a bill for ombud reform, which aims to achieve further consolidation of the ombud system.” Under this reform, the FAIS Ombud’s mandate would eventually merge into a restructured NFO. The NFO, while not a statutory scheme, would have more of a statutory underpin and mandatory jurisdiction across financial institutions. Its decisions will have the same weight as binding judgments. But these reforms are still a few years down the line.
The FIA President closed the unscripted conversation on a practical note, reminding intermediaries that their professional licence includes access to an ombud system designed to protect both clients and practitioners. “We are licensed. We are paying for an ombud that will protect you if you work with them,” he said. Jackson agreed, adding that ombud schemes protect intermediaries when customers come with a nonsense complaint.
The best form of defence
Her final advice was simple but powerful: “Do not fall into the ‘best form of defence is attack’ trap. You do not have to line up 17 lawyers to help you write a letter to the FAIS Ombud or NFO. Rather, cooperate, answer the questions and display a willingness to compromise.”
Writer’s thoughts:
Sound dispute resolution processes strengthen trust in professional advice by showing that fair treatment applies to both client and adviser. Do you review ombud findings to improve your advice process? Please comment below, interact with us on X at @fanews_online or email us your thoughts [email protected].
