The FAIS Ombud was created in terms of the Financial Advisory and Intermediary Services Act 2002 (Act No. 37 of 2002) (FAIS Act). The function of the FAIS Ombud is to resolve disputes relating to the rendering of financial services by providers where they have either failed to comply with the FAIS Act or where as a result of either wilful or negligent conduct by the provider the client has suffered or will potentially suffer prejudice or damage. The primary objectives of the FAIS Act is to ensure consumer protection and the integrity of the financial services industry and is underpinned on principles of contract law as well as equity.

In terms of the FAIS Act complaints must relate to a financial service that was rendered on or after 30 September 2004.

The FAIS Ombud is a statutorily created body. There are other voluntary ombudsmen created by the financial services industry who also deal with financial disputes. There is therefore a great deal of confusion about which ombudsman does what. Since 1 April 2005, the FAIS Ombud was granted the authority to act as Statutory Ombud. This means that the FAIS Ombud can deal with complaints where there is uncertainty over jurisdiction and where the other voluntary ombudsmen do not have jurisdiction.