Advocate John Simpson, the FAIS Ombud. 
A 45% surge in complaints flooded the Financial Advisory and Intermediary Services (FAIS) Ombud’s office in 2024/25, signalling an unprecedented rise in consumer awareness – even as systemic failures in financial advice, particularly around funeral policies, remain the sector’s dominant fault line.
However, consumers received compensation to the tune of a whopping R31.748-million, and the average time to close cases improved to 59.28 working days, with 98.06% of complaints finalised within six months, far exceeding the 85% target.
Advocate John Simpson, the FAIS Ombud, said his office received 15,404 complaints, up from 10,574 the previous year. Most of this increase came from general inquiries. Simpson noted that this reflects “a substantial increase in consumer awareness of our office. People appear to know about us far more than before and they’re contacting us.”
Of those, 3,382 complaints fell within the Ombud’s jurisdiction, down from 4,501 the previous year. Simpson attributed the decline partly to an average annual 31.5% reduction in complaints lodged against the 10 largest financial service providers, mainly insurers, since 2022. He also noted a regulatory change in claim jurisdiction, with the FAIS Ombud having increased its compensation limit from R800,000 to R3.5 million – though Simpson confirmed this had not, in itself, triggered a surge in cases. “The insurers are settling the matters and telling complainants about us if issues aren’t resolved,” he said, calling it a positive development.
The office closed 3,543 cases, down from 5,046 in the previous year, largely due to the closure of long-standing cases, including property syndication matters. Almost 41% of closed cases were resolved through awards or settlements, bolstered by early-stage resolutions in “premature complaints”, which are initial cases sent back to the financial service providers for mandatory resolution within six weeks before a formal investigation begins.
Funeral policies dominate complaints
Long-term insurance, particularly funeral policies, continued to drive the highest volume of advice-related complaints, accounting for 52.84% of formal cases, followed by short-term insurance (12.36%) and investment-related advice (11.80%).
Two of the three formal determinations issued involved funeral policy providers found guilty of serious misconduct. In the first case, a provider was ordered to pay R20,000 plus interest after operating without an underwriter and blaming a third-party premium dispute for non-payment. In the second case, a firm was instructed to settle an outstanding R5,000 after failing to prove it had informed a client of a premium increase, violating the Policyholder Protection Rules.
Gaps in investment advice and disclosure
Simpson also highlighted weaknesses in certain investment practices. In one case, a client invested R3-million, expecting a R20,000 monthly income without any capital loss. The Ombud found the provider had failed to warn the client that the 9.5% withdrawal rate was unsustainable and provided no evidence of the required annual reviews. The matter was settled for R75,000 after conciliation, but the case underscores the risks investors face when assumptions about returns and capital preservation go unexamined.
In another instance, a vehicle insurance provider was ordered to settle a claim after failing to personally notify the client about the requirement for a second tracking device, relying only on a general email campaign. Simpson said this was “not sufficient compliance with the Code”. This highlights the potential pitfalls when critical information is communicated passively rather than directly.
Efficiency, accountability and transparency
Simpson stressed transparency, unveiling a new online case summary initiative. “Our aim is that FSPs and complainants can see similar cases we’ve dealt with before and get guidance on our approach,” he said.
As the office continues its integration with the National Financial Ombud Scheme (NFO), Simpson underscored a core principle driving the FAIS Ombud: “Justice, fairness and the rule of law are more important than chasing numbers. Our priority is to deliver fair, logical judgments that are properly reasoned and explained.” DM
For any complaints related to financial advice, contact the FAIS Ombud office on:
- Phone: 012 762 5000 / 012 492 9711;
- Sharecall: 086 066 3274;
- Email: communications@faisombud.co.za; or
- Website: www.faisombud.co.za