Ombudsman making sure financial advisers toe the line

PRETORIA – Consumers misled by their financial advisers have got back R3,5 million since September 2004, the ombudsman for financial services providers said on Thursday.

The office of ombudsman Charles Pillai, had received 310 complaints “worthy of consideration”, of which 134 were resolved in favour of consumers. The remainder were at various stages of resolution or investigation.”Judged by the complaints we have resolved and the amount returned to consumers, I am confident unsuspecting clients stand to get back tens of millions of rand invested with unscrupulous advisers,” Pillai said in a media statement.”Consumers only need to realise that the FAIS (Financial Advisory and Intermediary Services) ombud’s office is available and offers a free service to redress the wrongs perpetrated against consumers.”His investigations had unveiled numerous undesirable trends and practices, Pillai said.”The focus of some financial advisers is simply to sell financial products that pay attractive commissions, rather than render a professional service that is in the best interests of the client.”Clients were often directed towards a commission-paying financial product, whether they needed it or not.The non-disclosure of fees, charges and commissions was common.The industry should stop the allure of incentives causing advisers to act against the best interests of consumers, Pillay said.”It is worrying that many complaints come from people over the age of 60, who are generally the most vulnerable in our society.”Pillai rejected calls from the industry for his office to produce a blueprint on the adjudication of cases, saying each matter was determined on its own merits.”We need to do away with the era of non-disclosure, unreadable fine print and miss-selling.We need to usher in a new era where legitimate industry players treat the consumer equitably.”-Nampa-SapaThe remainder were at various stages of resolution or investigation.”Judged by the complaints we have resolved and the amount returned to consumers, I am confident unsuspecting clients stand to get back tens of millions of rand invested with unscrupulous advisers,” Pillai said in a media statement.”Consumers only need to realise that the FAIS (Financial Advisory and Intermediary Services) ombud’s office is available and offers a free service to redress the wrongs perpetrated against consumers.”His investigations had unveiled numerous undesirable trends and practices, Pillai said.”The focus of some financial advisers is simply to sell financial products that pay attractive commissions, rather than render a professional service that is in the best interests of the client.”Clients were often directed towards a commission-paying financial product, whether they needed it or not.The non-disclosure of fees, charges and commissions was common.The industry should stop the allure of incentives causing advisers to act against the best interests of consumers, Pillay said.”It is worrying that many complaints come from people over the age of 60, who are generally the most vulnerable in our society.”Pillai rejected calls from the industry for his office to produce a blueprint on the adjudication of cases, saying each matter was determined on its own merits.”We need to do away with the era of non-disclosure, unreadable fine print and miss-selling.We need to usher in a new era where legitimate industry players treat the consumer equitably.”-Nampa-Sapa