Future-proofing advice
South Africa's financial advice and insurance landscape is entering a period of profound change. Artificial Intelligence (AI), evolving regulation, emerging risks and changing consumer expectations are reshaping how advisers operate and how clients engage with financial services providers.
For intermediaries, the challenge is not simply keeping pace with change. It is finding ways to use new technologies, navigate increasing compliance requirements and deliver meaningful value to clients in an environment where trust, affordability and personalised advice matter more than ever.
FAnews spoke to Lizelle van der Merwe, CEO of the Financial Intermediaries Association of Southern Africa (FIA), about the trends reshaping the advice profession, the opportunities and risks presented by AI, the implications of the forthcoming Conduct of Financial Institutions (COFI) framework, and the skills advisers will need to remain relevant in the years ahead.
According to Van der Merwe, the next few years will require advisers to rethink both their operating models and their client relationships.
“The adoption and impact of AI is a major trend straddling the domestic and international intermediary markets, with intermediaries under pressure to develop their own AI responses while accommodating tech adoption at both the client and provider,” she says.
At the same time, advisers must contend with “growing cyber risks, rising regulation and skills shortages”, all of which are influencing the future of the profession.
AI is not the adviser - but it will reshape advice
Few developments have generated as much discussion in financial services as AI. From underwriting and claims processing to customer engagement and compliance monitoring, AI is rapidly becoming embedded throughout the insurance value chain.
Van der Merwe believes advisers should view AI primarily as an opportunity rather than a threat. “AI is a tool, but a powerful one,” she says. “It can help advice businesses with administration, client communication, compliance monitoring and fraud detection, to name a few.”
The efficiency gains could be significant, particularly for smaller practices. “Small to medium financial services providers (FSPs) that leverage the technology sensibly will be able to service more clients with the same staff complement.”
However, she cautions against allowing technology to replace human accountability. “The danger is in removing human judgement from the loop. Ultimately, it is the intermediary, not the machine, that is accountable for the advice, communication or client outcomes.”
Instead, advisers should focus on combining technology with human expertise. “AI can do the heavy administrative ‘lifting’ by, for example, wading through heaps of unstructured data to create summaries or flag issues; the human can focus on emotional support at claims stage, reading the room during a client meeting or talking the regulator through automated processes.”
Her thoughts are straightforward: “Used well, AI strengthens the intermediary; used badly, it introduces risk.”
Regulation remains a reality - but also an opportunity
Alongside technological disruption, regulation continues to be a defining feature of the advice environment. For many advisers, the forthcoming COFI framework remains one of the most significant developments on the horizon. “At an operational level, the COFI Bill and OMNI Risk Returns introduce significant compliance challenges for our members,” says Van der Merwe.
The good news is that many intermediaries may already be well positioned. “FAIS-compliant intermediaries built around Treating Customers Fairly (TCF) principles are probably quite close to meeting the COFI requirements already.”
Nevertheless, she acknowledges concerns around implementation, particularly for smaller firms. “There are concerns that smaller advice practices might struggle with the technical aspects of the OMNI Risk Returns.”
Van der Merwe describes COFI as “a wholesale shift to activity and principles-based regulation” and believes advisers should begin preparing now. “The practical starting point is to make sure your advice offering is built on sound TCF principles, including having clear and documented advice processes; a demonstrable focus on client outcomes; and proper record-keeping.”
Rather than viewing compliance as a burden, advisers can use the transition to strengthen their value proposition. “There is a huge opportunity for intermediaries to leverage COFI compliance to make their value offering clearer. Those who embrace these conduct regulations will reinforce trust across client and provider relationships.”
Meeting the expectations of a digital generation
Technology is not only changing adviser operations; it is also transforming client expectations. As younger, digitally native consumers become a larger part of the market, advisers face increasing pressure to deliver faster, simpler and more personalised experiences.
According to Van der Merwe, the starting point is removing unnecessary friction from the client journey. “Intermediaries have to remove friction from the customer experience.”
This means embracing digital tools and automation while maintaining the personal element that remains central to quality advice. “One of the best ways to do this is to meet consumers on their terms, using a mixture of AI, automation, digital platforms and machine learning to deliver the expected efficiency and personalisation.”
Yet technology alone will not be enough. “The clever combination of technologies improves the customer experience, but it never replaces human relationships or the need for trusted advice.”
This balance between efficiency and personal connection may become one of the key differentiators between successful advice businesses and those that struggle to remain relevant.
Affordability, trust and emerging risks
Economic pressure remains a daily reality for many South African households, placing insurance affordability under increasing strain.
For advisers, the challenge is helping clients maintain appropriate protection without making short-sighted decisions. “The practical challenge is to prevent affordability pressure from becoming an unadvised cancellation decision,” says Van der Merwe.
She encourages advisers to work proactively with clients to restructure cover where necessary. “Intermediaries can help clients to restructure their insurance portfolios by reviewing the cover types and sums insured and considering higher excesses or sensible risk mitigations.”
At the same time, advisers must help clients understand the consequences of reducing cover. “Short-term thinking needs to be avoided because cutting cover may solve a monthly cash flow problem, but it can also shift a major loss back onto the client.”
Ultimately, “good advice helps the client protect what they cannot afford to lose.”
Trust plays an equally important role in these conversations. “Intermediaries can build trust by making their independence and judgement visible,” says Van der Merwe. “The client must feel that the intermediary is responding to their unique risk needs rather than simply selling a product.”
She argues that advisers demonstrate value through ongoing engagement rather than transactional interactions. “Successful advice practices show their value through ongoing risk advice and claims advocacy.”
Beyond affordability, advisers are increasingly being called upon to address risks that barely featured in client discussions a decade ago. “The advice conversation needs to move from the cost of cover to a broader consideration of emerging risks and how these risks potentially impact the client.”
Cyber threats and climate-related events are becoming increasingly relevant across both commercial and personal insurance lines. “A practical understanding of the business or household gives intermediaries an edge when protecting these clients from the next cyberattack or extreme weather event.”
Van der Merwe notes that technology itself is also helping advisers respond to these emerging risks. “One of the methods gaining prominence in the complex commercial insurance segment is to use AI to compare policy wordings across the market and ensure there are no gaps in cover.”
The adviser of the future
Looking ahead to 2027, Van der Merwe believes the industry's most successful professionals will be those who move beyond product-focused conversations and embrace a broader advisory role. “Successful intermediaries will be those who move decisively from product selling to risk advice.”
Technology will continue to play a central role, but only when combined with human expertise. “And those who leverage AI and digital tools without sacrificing their humanity will excel.”
As automation increasingly simplifies onboarding and quotation processes, advisers will need to demonstrate value elsewhere. “Onboarding clients or quoting new business is becoming easier to automate, so the intermediaries' value lies in helping clients understand risks and the practical consequences of the covers, exclusions and risk mitigations intermediaries negotiate on their behalf.”
This evolution will place greater emphasis on uniquely human capabilities. “Empathy, judgement and trust are non-negotiable parts of future-fit intermediary-client relationships.”
For advice practices already grappling with rising compliance costs, skills shortages and increasing operational complexity, the road ahead may appear challenging. Yet, the FIA's message is ultimately optimistic.
The future does not belong to advisers who resist change, nor to those who rely exclusively on technology. It belongs to professionals who successfully combine digital efficiency with human judgement, regulatory discipline with client-centricity, and innovation with trust. As Van der Merwe puts it: “The adviser of 2027 will use technology for cost and efficiency benefits, but remain accountable for good, independent, human advice.”
Writer’s Thoughts
The conversation highlights an advice profession navigating significant change on multiple fronts, from AI adoption and regulatory reform to affordability pressures and emerging risks. Yet amid this evolution, the intermediary's role as a trusted adviser remains firmly at the centre of delivering positive client outcomes. Please comment below, interact with us on X at @fanews_online or email me your thoughts.
