In an unanticipated step, the Office of the Ombud for Financial Services Providers (FAIS Ombud) has agreed to review a previously adverse determination against a financial advisor. The previous referral to the industry regulator related the advisor’s alleged “unconscionable conduct” in advising an 80-year-old woman allegedly suffering with Alzheimer Dementia to make a high-risk investment in a failed property syndication scheme.
Moneyweb confirmed that the Ombud agreed to reconsider the adverse determination against Jan Labuschagne Makelaars CC and Jan Harm Labuschagne, resulting in the Financial Services Tribunal issuing an order in line with this agreement.
This follows an application lodged by Labuschagne, requesting reconsideration of the determination, “in which he cast doubt on the accuracy of some of the claims made in the complaint – including the date on which the woman was diagnosed as suffering from Alzheimer Dementia and the authenticity of the medical certificate supplied in support of this diagnosis.”
Notwithstanding the challenges raised by Labuschagne and the ultimate outcome, the unscrupulous practice – where the elderly and the sickly are given wrong advice by predatory individuals, who then blindly trust these advisors, often resulting in their financial ruin – is an all too frequent occurrence in South Africa.
Without having had sight of all the evidence in the matter under discussion, we cannot comment on whether the relevant advisor was guilty of the transgressions in the complaint. These matters are most often complicated in terms of the evidence, because those who typically make the complaints to the ombudsman are not represented by attorneys and may not appreciate the rules of evidence, whereas the respondent or financial advisor are often more equipped.
For this reason we believe the Ombud should keep the comparative ability of the parties to present their cases in mind when considering the probabilities of the case – which it appears to have been the case in this matter.
It also happens that where the evidence present sufficient material disputes of fact, the Ombud may not be able to make a determination, such as trial court is able to do after evidence being led.
We remain supportive the good work of the Ombudsmen in the financial services industry and we encourage those who suffer as a result of unlawful practices, to contact their attorneys to assist them with their presentation of complaints.
