In April 2021, the Supreme Court of Appeal dismissed the review of determinations made by the FAIS Ombud established in terms of the Financial Advisory and Intermediary Services Act of 2002 (FAIS Act). The SCA was called upon to decide whether the Ombud had committed a reviewable error in determining complaints lodged by the respondents.
In 2015, the Ombud received several complaints against the applicants, Impact Financial Consultants and its principal member, Mr Calitz. The complaints related to advice given to the respondents by Mr Calitz as a representative of Impact Financial Consultants. The applicants were authorised financial services providers accredited under the FAIS Act.
The FAIS Ombud had decided against the applicants for failing to comply with various provisions of the FAIS Act and its Code of Conduct.
In their application for leave to appeal, the applicants contended that the Ombud had no jurisdiction to consider the respondent’s complaints because the respondents had invested in a fund that was not a financial product as defined by the FAIS Act.
The court found that the Ombud failed to determine whether the advice given to the respondents by the applicants related to a financial product, in order to establish and exercise her jurisdiction.
The Ombud also failed to investigate the claims despite the extensive investigative powers bestowed upon her by the FAIS Act.
The Ombud’s failure to determine her jurisdiction before determining the complaints was a reviewable error.
The court set aside the Ombud’s determinations and referred the complaints back to her for further investigation and determination.
*This blog was co-authored by Lisa Kriegler