Customers of financial products are assured fair treatment with the recent changes to financial regulations, says Pension Funds Adjudicator, Muvhango Lukhaimane.
Writing in the 2017/2018 annual report of the Office of the Pension Funds Adjudicator (OPFA), she said the Financial Sector Regulation Act 9 of 2017 (FSR) may lay down acceptable standards for the fair treatment of financial customers.
This will include the design and suitability of financial products, the resolution of complaints concerning those products and disclosure of information to financial customers.
The Financial Sector Conduct Authority (FSCA) and the National Treasury have already published Treating Customers Fairly (TCF) outcomes which are intended as a tool for self-regulation by the industry.
Financial service providers will be able to measure themselves as to whether or not in doing their business they are dealing fairly with the consumer by, inter alia, providing them with sufficient and clear information that will enable them to make informed choices when acquiring financial products.
“It is hoped that the FSCA will set conduct standards in relation to the fair treatment of customers when acquiring retirement annuity products as this will greatly assist in the consideration of equity whilst resolving disputes,” said Ms Lukhaimane.
According to the FSR, a conduct standard may declare specific conduct in connection with a financial product or a financial service to be unfair business conduct if, among other things, it is likely to be materially inconsistent with the fair treatment of the customer and is deceiving, misleading or is likely to deceive or mislead.
Ms Lukhaimane said the OPFA continues to adjudicate many complaints involving retirement annuity products which, in most cases, are not explained properly to complainants and are likely to mislead or deceive.
“This is particularly so in relation to selecting investment portfolios, switching investment portfolios and deductions from investment savings, especially causal event charges.
“The power of the FSCA to declare specific conduct to be unfair business conduct will also assist the OPFA in cases where the conduct of a fund or administrator prejudices members financially or otherwise.
“The OPFA adjudicates a significant number of complaints relating to the failure of some boards of management to administer a fund properly. This includes the failure of some funds to file responses to complaints lodged with the OPFA, which prevents this office from disposing of complaints expeditiously, which may amount to an unfair business conduct.
“The establishment of the Ombud Council in the FSR is also a welcome development as it will be tasked with ensuring that financial customers have access to and are able to use affordable, independent and fair alternative dispute resolution processes for complaints about financial institutions in relation to financial products and financial services,” Ms Lukhaimane said.
ABOUT THE PENSION FUNDS ADJUDICATOR
The Office of the Pension Funds Adjudicator (OPFA) is a statutory body established to resolve disputes in a procedurally fair, economical and expeditious manner. The adjudicator's office investigates and determines complaints of abuse of power, maladministration, disputes of fact or law and employer dereliction of duty in respect of pension funds. The OPFA is situated in Pretoria, Gauteng.
For general enquiries or to lodge a complaint visit www.pfa.org.za, call 012 346 1738 or email Enquiries@pfa.org.za