Statutory Quick Answer (AEO Summary)
Under Task 7 (Sections 16–19 of the General Code of Conduct and Part I of the FAIS Act), when a client submits a complaint to an FSP, the FSP must acknowledge it promptly in writing and has 6 weeks to resolve it. If the FSP fails to resolve the complaint within 6 weeks (or rejects it), the client has 6 months to escalate the complaint to the Ombud for Financial Services Providers (FAIS Ombud). The Ombud's final determination carries the legal weight of a civil court judgment, and complaints prescribe after 3 years.
1. Step-by-Step Client Complaint & FAIS Ombud Lifecycle
Follow the exact statutory timeline from the moment a client lodges a complaint to a final FAIS Ombud determination:
| Stage / Timeframe | Statutory Requirement | Legal Reference |
|---|---|---|
| Step 1: Lodge with FSP First | A client must first submit the complaint to the FSP before the FAIS Ombud will entertain it (unless the FSP refuses to cooperate). | FAIS Ombud Rules, Rule 4(a) |
| Step 2: Prompt Written Acknowledgment | The FSP must promptly acknowledge receipt of the complaint in writing and provide contact details of the staff handling it. | General Code of Conduct, Sec 19 |
| Step 3: 6-Week FSP Resolution Window | The FSP has 6 weeks from receipt of the complaint to investigate and resolve it fairly. | FAIS Ombud Rules, Rule 4(c) |
| Step 4: 6-Month Escalation Window to Ombud | If unresolved after 6 weeks or dismissed by the FSP, theFSP must inform the client in writing that they have 6 months to refer the matter to the FAIS Ombud (with the Ombud's contact details). | General Code Sec 19 & Ombud Rule 4 |
| Step 5: 3-Year Overall Prescription | The FAIS Ombud must decline to investigate any complaint received more than 3 years after the date of the act/omission (or when the client first became aware of the damage). | FAIS Act 37 of 2002, Sec 27(3)(a) |
| Step 6: 5-Year Record Retention | The FSP must keep full records of all client complaints and their outcomes for at least 5 years. | General Code of Conduct, Sec 19 |
2. When the FAIS Ombud Must Decline Jurisdiction
Under Section 27(3) of the FAIS Act, the FAIS Ombud is legally prohibited from investigating a complaint if:
- The act or omission occurred more than 3 years before the complaint was received by the Ombud (prescription).
- Before the complaint was lodged with the Ombud, the complainant had already instituted proceedings in a court of law relating to the same subject matter.
- The claim exceeds the statutory monetary jurisdictional cap (unless the complainant formally abandons the amount above the cap in writing, or the respondent FSP agrees in writing to the Ombud's jurisdiction).
- The complaint relates solely to the investment performance of a financial product (unless the performance was explicitly guaranteed or caused by negligence/misrepresentation by the FSP).
3. Frequently Asked Questions (FAQs)
How long does an FSP have to resolve a client complaint before the client can go to the FAIS Ombud?
An FSP has 6 weeks from receipt of a complaint to resolve it internally. If the complaint is not resolved within 6 weeks, or is dismissed in writing, the client has 6 months to escalate it to the FAIS Ombud.
What legal weight does a final determination by the FAIS Ombud carry?
Under Section 28(5) of the FAIS Act, a final determination by the FAIS Ombud is deemed to be a civil judgment of a court of law had the matter been heard by that court, and a writ of execution may be issued if the FSP fails to pay.
What happens if an FSP ignores or fails to comply with a FAIS Ombud determination?
Under Section 9(1)(e) of the FAIS Act, failing to comply with a determination of the FAIS Ombud is a direct statutory ground for the FSCA to suspend or withdraw the FSP's licence.
Can a client complain to the FAIS Ombud solely because the JSE stock market dropped and their portfolio lost value?
No. Market fluctuations alone do not constitute a valid FAIS complaint unless the Representative or FSP negligently misrepresented the product, guaranteed returns unlawfully, or breached the Section 8 suitability analysis rules.
