The FAIS Ombud’s office aims to resolve disputes in the most expedient and conciliatory way possible, as this approach benefits consumers and the financial services providers.
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The Office of the FAIS Ombud, advocate John Simpson, said it continues to see a steady increase in complaints from day trading and online trading platforms, with online trading complaints now accounting for 16.5% of all formal complaints received by the Office since April 1, 2026.
The office said 64% of online trading-related complaints they receive are about the redemption of the investment, with another 26% alleging unfair treatment. Of those complaints closed, 66% were dismissed due to a lack of reasonable prospects of success, the Office said in a statement.
“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,” the Ombudsman said.
The complaints received often involve millions of rands worth of investment losses suffered. Online day trading 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 by utilising a trading bot, the information is based purely on speculation about potential fluctuations in asset values.
The traders also use concepts such as leverage, margin calls, and stop-loss orders that can magnify the risk.
Consumers who use 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.
“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 Office said.
“The consumer often alleges that trading advice was provided on an ongoing basis; however, they usually 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 said.
The Ombud said it would like to caution 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,” the Ombud said.
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