COFI and Omni-RR: Why IFAs Aren’t Going Anywhere

Regulation is changing – but independent advice isn’t going anywhere. Here’s what COFI and Omni-RR really mean for IFAs.

For many independent financial advisors (IFAs), the regulatory changes introduced through the Conduct of Financial Institutions (COFI) Bill and the revised Omni-Risk Return (Omni-RR) may feel daunting. But when we look closely at these frameworks a far more encouraging picture emerges.

Cutting through the noise
At the moment, there is a great deal of noise in the industry, including suggestions that IFAs may struggle to survive the regulatory changes ahead. But COFI and Omni-RR do not signal the end of IFAs, nor do they create an environment where small practices cannot function.

While there will be teething problems – as there are with any notable change – this does not mean that IFAs will be unable to cope. Many of the practices encouraged under COFI and Omni-RR already exist in most IFA businesses: maintaining clear records, understanding clients and taking Treating Customers Fairly (TCF) seriously. For those who still need to strengthen these areas, the changes offer an opportunity to make better use of data and build even more sustainable, client-centred practices.

Why regulatory change does not signal the end for IFAs
IFAs will remain a vital part of South Africa’s financial ecosystem. They provide independent advice, build long-term, trust-based client relationships and support financial literacy and inclusion. These strengths align closely with the Financial Sector Conduct Authority’s (FSCA) focus on improved outcomes and professional conduct – and the regulator wants IFAs to succeed under the new regulations. Corporates and tied agencies contribute meaningfully to the industry as well, but independence remains a valuable and viable choice.

Moreover, IFAs have weathered major regulatory shifts before, including the introduction of FAIS in 2004. At the time, many feared an end to independent advice – yet the sector adapted and strengthened.

And remember: independent advisors have invested years into building their practices, nurturing client relationships, refining advice processes and establishing trusted reputations. That foundation does not disappear because regulation evolves. You built your business over time, and with steady preparation, there is every reason to remain confident that you can carry it forward into the next regulatory era.

Change won’t happen overnight
To help the industry adapt and advisors prepare, both COFI and Omni-RR follow a phased rollout:

• COFI includes a transition period, giving IFAs time to align with the new activity-based licensing model. FSPs will continue operating under existing FAIS licences until their new COFI licences are issued.
• Omni-RR will be piloted first, giving the industry an opportunity to refine the model before it becomes mandatory.
• Proportionality is built into both frameworks, and IFAs won’t be expected to meet the same requirements or adopt the same processes and procedures as large corporates.

This staggered approach recognises the diversity of the market and ensures that smaller firms can adapt realistically and sustainably.

How IFAs can prepare
Preparing for COFI and Omni-RR may feel overwhelming at first, but focusing on a few core areas can make the process far more manageable:

• Keep client data clean and current. Reliable data makes future reporting simpler and improves advice outcomes.
• Document your advice process. Clear, consistent record keeping helps evidence good practice and reduces pressure later.
• Review internal workflows. Standardised checklists, clearer file structures and small refinements go a long way in supporting compliance.
• Understand your activities. COFI’s licensing model is based on what a business does, so identifying your primary activities early can prevent uncertainty.
• Plan for succession. Documenting key processes and responsibilities supports continuity and aligns with COFI’s governance expectations.
• Use technology consistently. COFI and Omni-RR do not require complex systems; even simple, reliable tools used consistently can ease reporting and reduce administrative strain.

These steps build resilience and make upcoming changes easier to manage. And for those who feel uncertain at any point, support from a compliance service provider can help clarify requirements and ease the transition.

Evolving alongside our clients
Regulatory change affects everyone in the sector – including compliance service providers. As the environment has shifted, we have adapted our systems, strengthened internal processes and upskilled our staff to ensure the support we offer remains practical and aligned with regulatory expectations.

Over the past two years, we have taken deliberate steps to help clients prepare for what lies ahead. We tested elements of the revised Omni-RR with participating members to understand how the requirements may apply across different types of FSPs, including IFAs, and reviewed the return to identify areas where additional clarity may be needed.

Our Research and Development Department also analysed the various COFI transition elements to determine their impact on IFAs, and we have incorporated these insights into our client engagements – focusing on data readiness, outcomes-based supervision and TCF.

We continue to engage with the FSCA through industry committees and consultation processes. This allows us to both raise IFA concerns directly with them and anticipate how regulatory updates may affect practices and prepare our clients accordingly.

From doubt to opportunity
This is not a moment for IFAs to doubt their place in the sector. It is an opportunity to demonstrate the professionalism and resilience that have always defined independent advice.

COFI and Omni-RR represent meaningful change, but they are measured, manageable and navigable. With the right preparation and support, IFAs are more than ready for what comes next.