Adv John Simpson, the FAIS Ombud
In December 2025, the Office of the FAIS Ombud issued a press release focusing on day trading and online trading platforms due to the steady increase in such complaints. That trend has continued into the new financial year, with online trading complaints accounting for 16.5% of all formal complaints received by this Office since 1 April 2026. These complaints often involve millions of Rands worth of investment losses suffered.
Just to recap, online day trading essentially involves buying and selling financial instruments, such as stocks, currencies, commodities, indices, and contracts for difference (CFD), through internet-based platforms. Here, one speculates on the short-term fluctuations of these assets, based on the expectation of generating substantial returns not typically provided by traditional investment vehicles. Whether the platform provides AI-generated information, technical data from an in-house broker or consultant, or utilises a trading bot, the information is based purely on speculation about potential fluctuations in asset values. Added to this are concepts such as leverage, margin calls, and stop-loss orders that can magnify the risk.
Consumers who utilise these trading platforms open trading accounts of their own accord and provide the entity with all necessary information, including due diligence details and an onboarding questionnaire. The consumer is also required to confirm that they have read, understood, and accepted the entity’s terms and conditions. These risk-disclosure documents are also publicly available on the entities’ websites. While being registered as Financial Services Providers by the Financial Sector Conduct Authority, the majority are not registered to provide advice and are limited to rendering intermediary services. This aspect is also well-documented by these entities. Even those entities licensed to provide advice go to great lengths to document and record that no advice is being provided.
When the Office receives these complaints, the investigation often finds that the consumer signed and accepted all the terms and conditions, as well as the significant risks involved. The consumer often alleges that trading advice was provided on an ongoing basis; however, they typically lack any documentary or other evidence to support this claim. As the consumer executed and approved their trades personally, there is no basis for holding the trading platform liable for the losses suffered. Further, the Office is generally unable to investigate the investment performance of a financial product unless that performance was expressly guaranteed.
The Office of the FAIS Ombud would again like to caution prospective consumers who wish to utilise these online trading platforms that there is extreme risk involved in day-trading, especially derivative trading in CFD. We highly recommend that you do your homework and equip yourself with the information needed to make an informed decision. A simple internet search on whether online day trading (and CFD trading) is a viable profit-making strategy for average consumers will reveal the extreme risk involved.
64% of online trading-related complaints we receive are regarding the redemption of the investment, with another 26% alleging unfair treatment. Of those complaints closed to date, 66% were already dismissed due to a lack of reasonable prospects of success. An online trading platform is not a financial product in terms of the FAIS Act as it only provides a trading mechanism, not a financial product. As the consumer executes the trades themselves entirely online, the prospect of a finding in favour of the complainant in these matters is generally very low.
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 complaint in writing 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.
ENDS
