Joleen John
Anri Dippenaar
Jaco Fourie
Norman van Rooyen
Andrea Arenz
Lizl Budhram
FSCA team left to right: Sidwell Francis, Business Centre Manager; Marrelie Victor, Insurers’ Supervision Department Manager; and Xolani Mkumla Investment Providers Department Manager
From Omni-CBR (Conduct of Business Return) insights to succession planning, Masthead’s Cape Town MasterClass, Future-Proof Your Business: Gain Insights into Tomorrow’s Challenges, provided independent financial advisors (IFAs) with valuable lessons on navigating an evolving financial landscape.
In October, Masthead hosted its final MasterClass for 2024, bringing together industry experts to discuss compliance, risk management, succession planning and retirement reform. The event offered IFAs practical strategies to stay ahead in the ever-changing financial services sector.
The Importance of Foresight in Business
Joleen John, Managing Director of the Masthead Group, opened the event by highlighting the role of compliance as an enabler of success, likening it to the brakes on a car: “If you own a fast car, you want to drive it at its best, but without good brakes, you’re going to crash. Compliance isn’t there to slow you down; it’s there to help you go faster. That's how we see our role in your business – we’re here to enable your success.”
She stressed that the success of IFAs depends on their ability to anticipate challenges and adapt to change. Reflecting on Masthead’s 20-year journey, Joleen highlighted how the company has also evolved to offer a comprehensive range of services, including compliance with FAIS, FICA, NCR and POPIA, serving a diverse client base – from legal practitioners to crypto asset providers.
Future of Compliance: Leveraging Technology and Data
Anri Dippenaar, Masthead’s Head of Compliance, referenced the PwC Risk Report to illustrate how businesses can embrace risk as an opportunity through technology and data. “Business as usual is not an option – but we’re here to ensure that you participate in these changes meaningfully and that your business thrives,” she said.
She concluded with five key tips to future-proof compliance in your financial advice practice:
1. Clarify your business view: Stay updated on your clients, services and products for informed decision-making.
2. Set key risk indicators: Monitor and align key risk and business metrics with market conduct expectations.
3. Proactively monitor risk: Implement processes to act on risk indicators and take corrective measures as needed.
4. Embed a TCF culture: Foster a culture of Treating Customers Fairly through training, empowerment and sound decision-making.
5. Use root cause analysis: Address key risks by identifying and understanding their root causes.
Succession Planning and Risk Management for Business Succession
Jaco Fourie, Chief Business Development Officer at Masthead Financial Planning, spoke about the critical need for succession planning in the financial services industry. “Even if you’re young, plan now – not because [it’s a regulatory requirement], but because it’s important for your future and that of your beneficiaries,” he advised. He added that succession planning protects your clients, and thus your income stream.
Jaco continued that succession planning isn’t just for retirement – it’s also a safeguard for unforeseen events. He shared a checklist for successful succession planning, starting with finding a suitable successor. This should be someone you get along with, as they are more likely to connect well with your clients, ensuring a smooth transition. The successor should also hold the same product provider contracts. Jaco also discussed other key tips, such as incorporating the succession plan into a will and securing executor buy-in.
Supporting Financial Advisors in a Changing Industry
Norman van Rooyen, the Western Cape Representative for the Masthead Financial Advisors Association, shared his thoughts on the evolving role of financial advisors. He reflected on the shift from a commission-driven industry to a client-focused, regulated environment. “We all run successful businesses, and what we have in common is clients, regulation – and Masthead,” he said.
Norman compared the industry’s regulatory shifts to the Springboks adapting to new rugby rules while still winning trophies, emphasising that embracing regulatory changes is crucial for staying competitive.
Dispute Resolution and the FAIS Ombud’s Commitment to Fairness
Andrea Arenz, Senior Adjudicator at the FAIS Ombud, provided insights into the Ombud’s role in resolving disputes between consumers and FSPs. She noted recent improvements, such as the new jurisdictional limit of R3.5 million and the faster closure of cases with no prospects of success within 30 days.
She shared cases studies demonstrating the importance of understanding and explaining products thoroughly to clients. For example, in one case, a complainant was sold a dread disease cover policy that ceased at age 60, despite being over 60 at the time.
Andrea also encouraged FSPs to adopt a proactive attitude toward complaints, advising them to engage early to prevent frustration and lengthy disputes. In addition, empathy goes a long way. “Clients accept outcomes better when they feel heard and involved,” she said.
Two-Pot Retirement System: Busting the Myths
Lizl Budhram, Head of Advice at Old Mutual Personal Finance, presented on the recently introduced two-pot retirement system. She praised the legislation, calling it “one of the best pieces of legislation I’ve seen in over 25 years”, and debunked common myths about the system, such as misconceptions around savings accessibility and tax implications.
Lizl emphasised that while the system offers flexibility, its long-term goal is to ensure better retirement outcomes for South Africans. She noted that advisors play a crucial role in educating clients about the impact of early withdrawals on retirement investments.
The FSCA’s Supervisory Approach and Omni-CBR Progress
The event concluded with insights from FSCA representatives Xolani Mkumla and Marrelie Victor. Xolani, Investment Providers Department Manager, explained the FSCA’s proactive supervisory approach aimed at addressing risks at their source. “Our aim is to address the source of the risk and be proactive,” he noted.
Marrelie, Insurers’ Supervision Department Manager, provided updates on the Omni-CBR (Conduct of Business Returns) initiative, which aims to enhance transparency by collecting data on key conduct indicators. She acknowledged concerns about the costs but reassured attendees that the FSCA had reviewed the framework, reducing the number of questions and adding sector-specific sheets. “We are learning as we go and want this to be a collaborative endeavour between us and industry,” she said. The data, she added, will help businesses identify risks early, enabling them to take proactive measures.
Gaining Knowledge to Future-Proof Your Business
The Masthead MasterClass provided a valuable platform for FSPs to gain insights into the future challenges of the industry. From compliance and risk management to succession planning and understanding the regulator’s approach, the event equipped attendees with the tools and strategies they need to navigate the evolving regulatory landscape successfully.
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