The Short-term Ombudsman’s 2013 annual report contains an interesting perspective on regulation of the various Ombud schemes.
The Financial Sector Regulation Bill originally proposed a so-called single Ombudsman’s structure. This envisaged that all financial services Ombuds, as currently constituted, would fall under one single “Super Ombud”.
As part of this scheme, the sectoral Ombuds who would be responsible purely for dispute resolution, with all other administrative and policy functions being vested in the so-called super Ombudsman. All voluntary Ombudsmen had reservations about this model and those reservations were expressed in a joint memorandum submitted to the National Treasury in July 2013.
In response to this, the new Bill envisages that many of the existing arrangements will remain intact but with additional oversight over Ombudsman schemes being vested in the Financial Services Ombud Schemes Council (“FSOS Council”). Certain aspects of the bill remain a concern for the voluntary Ombuds, and are being addressed in consultation with the National Treasury. It is hoped that finality on the new model will be obtained during the course of 2014.
The proposals regarding the FSOS Council aim to provide better oversight over the various Ombuds, including the setting of norms and standards, monitoring of compliance by the various Ombudsmen schemes with the Financial Services Ombud Schemes Act (“FSOS Act”) and directing co-operation between schemes.
The FSOS Council is also likely to facilitate the “delineation of the jurisdictional boundaries between schemes” and enhancing public awareness of the schemes.
We foresee a far bigger role in future for the sectoral Ombuds in integrating the principles of Treating Customers Fairly. Through their liaison with product providers, they are able to discern policy issues, rather than isolated incidents based on a single complaint.
This should also level the playing field as far as advisors are concerned, and possibly lead to shared responsibility when things go wrong, rather than pointing fingers at the intermediary only.
