Adv John Simpson, the FAIS Ombud
As we celebrate Youth Day on Tuesday, 16 June, the Office of the FAIS Ombud would like to take the opportunity to focus on this demographic, which includes those aged 15 to 34. This population group, which makes up a third of South Africa’s population, interestingly accounted for only 18% of all formal complaints received by this Office during the 2025/2026 Financial Year. Of those complaints, a significant 67% concerned funeral insurance policies.
These numbers, specifically those for funeral insurance policies, support research indicating that funeral insurance is the most widely held insurance product amongst young people in South Africa, largely driven by the cultural need to protect family and extended family members.
Life cover policies, savings, and investments are, however, also tools that can help those starting out to effectively utilise their scarce resources to acquire assets and/or protect their income against unforeseen life events. The low adoption of these financial products is due to several factors, most notably a lack of financial literacy, so advice from a registered financial planner who is suitably qualified and appropriately registered with the Financial Sector Conduct Authority (‘FSCA’), would be valuable in helping youth make informed financial decisions. Having said that, approaching a financial planner can be daunting, and so to ensure a successful partnership, one needs to understand a few fundamentals when sourcing a financial planner.
The most important aspect is ensuring that the financial planner you are dealing with is registered with the FSCA to provide advice and intermediary services. Not only does this provide assurances that the FSCA is satisfied that the individual you are dealing with possesses the required skills and competencies, but it also provides you with recourse in the event of any misconduct or failure by the financial planner in the appropriate rendering of financial services to you. This is due to the fact that any financial planner who is licensed with the FSCA falls under the jurisdiction of the Office of the FAIS Ombud, which is empowered to investigate any advice that was provided to you and determine whether that advice was appropriate and in your best interests. Therefore, if you suffer any financial loss due to the inappropriate advice you received in respect of your life cover policy or funeral policy, which resulted in a claim being denied, where a short-term insurance claim was unsuccessful due to the advice received from your financial planner, or where the savings or investment product recommended to you failed to take in account your specific needs and circumstances and was inappropriate you can submit a complaint to this Office.
It is also important at this juncture to note that the youth are more inclined to utilise technology such as mobile-first apps and micro-investing platforms, etc., to grow their wealth. And whilst these innovations allow for easy access to investment opportunities, it is important to ensure that the entity one is dealing with is a registered financial services provider with the FSCA, as this allows one recourse to approach this Office in the event that there is any financial prejudice as a result of the advice provided and or financial service rendered. This Office is unable to assist with any investigation into an unlicensed entity, as these entities fall outside of this Office’s jurisdiction.
Other aspects to consider are understanding how the financial planner you are dealing with is remunerated. High fees and charges in the form of commissions and advisory fees can severely affect the long-term growth of your savings and investments, so ensure that you know whether your financial planner earns commission or charges a flat rate and how the collection of these fees will impact you in the long run. In this regard, it is also important to be aware of whether a financial planner is a tied agent, i.e., employed directly by a bank or insurance company and only provides advice on their employer’s products, or an independent advisor who can provide products from various insurers.
What will make the biggest impact on young consumers and those utilising financial services for the first time is for those consumers to empower themselves with basic information about the financial services and products recommended to them, so that they are able to make informed decisions and ensure that the financial planner selected focuses on their specific needs, whether that be budgeting, maximising tax-free savings, or protecting their income against unforeseen life events.
Should you believe that you have been financially prejudiced because of the financial service rendered to you with respect to a regulated financial product, please lodge a written complaint directly with the service provider. If the complaint remains unresolved after six weeks, you can visit our Complaints Portal at www.faisombud.co.za and select ‘Lodge Complaint’. Alternatively, you may submit a written complaint to info@faisombud.co.za. You can also call our Client Care Centre at (012) 762 5000 or Sharecall at 086 066 3274 for assistance in submitting a complaint.
Ed’s note: Watch EBnet’s interview with John Simpson, the FAIS Ombud here.
ENDS
