As South Africa prepares to commemorate Youth Day on June 16, the Office of the FAIS Ombud has noted the financial habits of young consumers, noting that funeral insurance remains the dominant financial product among the nation's youth. South Africans aged between 15 and 34 account for roughly one-third of the national population, and this demographic lodged 18% of all formal complaints received by the FAIS Ombud during the 2025/26 financial year. Of these complaints, 67% related to funeral insurance policies, reinforcing the claim that funeral cover is the most widely held insurance product among young South Africans.
The Office of the FAIS Ombud stated, "Life cover policies, savings, and investments are tools that can help those starting out to effectively utilise their scarce resources to acquire assets and protect their income against unforeseen life events." The FAIS Ombud advised young consumers, "The most important aspect is ensuring that the financial planner you are dealing with is registered with the Financial Sector Conduct Authority (FSCA) to provide advice and intermediary services." It added, "It is important to ensure that the entity one is dealing with is a registered financial services provider with the FSCA." The FAIS Ombud also emphasized, "What will make the biggest impact on young consumers and those utilising financial services for the first time is for those consumers to empower themselves with basic information about the financial services and products recommended to them."
Underutilised Long-Term Products
Life cover policies, savings, and investments offer young South Africans avenues to build assets and safeguard their income against unexpected life events, according to the Office of the FAIS Ombud. The Office of the FAIS Ombud stated, "Life cover policies, savings, and investments are tools that can help those starting out to effectively utilise their scarce resources to acquire assets and protect their income against unforeseen life events." Despite these benefits, the uptake of such long-term financial products remains comparatively low among younger consumers.
Limited financial literacy and a lack of awareness are factors contributing to this low adoption rate, the FAIS Ombud indicated. Consumers' financial empowerment, the Office suggests, begins with actively seeking to understand the financial products and services presented to them. The FAIS Ombud emphasized, "What will make the biggest impact on young consumers and those utilising financial services for the first time is for those consumers to empower themselves with basic information about the financial services and products recommended to them."
Securing advice from registered professionals is also critical. The FAIS Ombud advised, "The most important aspect is ensuring that the financial planner you are dealing with is registered with the Financial Sector Conduct Authority (FSCA) to provide advice and intermediary services." Furthermore, consumers should verify the registration status of any entity providing financial services. "It is important to ensure that the entity one is dealing with is a registered financial services provider with the FSCA," the FAIS Ombud stated.
Navigating Financial Advice
Consumers should ensure any financial adviser they engage holds a proper license from the Financial Sector Conduct Authority (FSCA), according to the Office of the FAIS Ombud. "The most important aspect is ensuring that the financial planner you are dealing with is registered with the Financial Sector Conduct Authority (FSCA) to provide advice and intermediary services," the FAIS Ombud stated. Registration with the FSCA confirms an adviser has met competency standards and provides consumers access to recourse mechanisms if issues arise. "It is important to ensure that the entity one is dealing with is a registered financial services provider with the FSCA," the FAIS Ombud added.
The FAIS Ombud is equipped to investigate complaints against licensed financial advisers concerning unsuitable advice. Young consumers, in particular, should understand how financial advisers are compensated, whether through fees or commissions, and how this impacts their long-term financial growth. Young investors should determine if an adviser operates as a tied agent, representing a single product provider, or as an independent adviser, offering a broader range of options. The FAIS Ombud emphasized the importance of consumer education, stating, "What will make the biggest impact on young consumers and those utilising financial services for the first time is for those consumers to empower themselves with basic information about the financial services and products recommended to them." This foundational knowledge is key for making informed decisions and protecting financial interests.
Digital Platforms and Regulation
The rapid growth of digital financial platforms presents both opportunities and risks for younger investors. These platforms offer new avenues for financial engagement but also necessitate careful scrutiny from consumers. The Office of the FAIS Ombud emphasizes that individuals must ensure any digital financial entity they engage with is registered as a financial services provider with the Financial Sector Conduct Authority (FSCA). "It is important to ensure that the entity one is dealing with is a registered financial services provider with the FSCA," the FAIS Ombud stated.
Verifying registration is a critical step for consumers, especially those new to financial services. The FAIS Ombud stressed that "What will make the biggest impact on young consumers and those utilising financial services for the first time is for those consumers to empower themselves with basic information about the financial services and products recommended to them." This empowerment includes understanding the regulatory status of providers. The FAIS Ombud specifically noted, "The most important aspect is ensuring that the financial planner you are dealing with is registered with the Financial Sector Conduct Authority (FSCA) to provide advice and intermediary services."
The Office of the FAIS Ombud cannot investigate complaints against entities operating outside the established regulatory framework. This limitation shows the importance of dealing only with registered providers, as unregistered platforms fall outside the Ombud's jurisdiction, leaving consumers with limited recourse in case of disputes or misconduct. Young investors are encouraged to prioritize due diligence to protect their financial interests on these emerging digital platforms.
