Moonstone: Do what is right

The old adage “When America sneezes, the rest of the world develops a cold” has a slightly different twist in so far as the financial services industry in South Africa is concerned. Here it is a case of keeping an eye on what happens in the industries in the UK and Australia to try and anticipate what will happen here.

A recent article entitled "Have planners planned for own future?" in the Sydney Morning Herald on the over-cooked topic of fees versus commission provides a slightly different angle. In the discussions in the blog following on from the article, both clients and advisors relate their views on the difference made by regulation of the industry to the quality and value of advice in Australia since inception.

Please click here to read the article and the opinions expressed.

To my mind, these views just confirm again what a reader recently said: “You cannot legislate morality.” The real challenge is to change the mindset of people; get them to buy in to the concept and ideals of regulation.That is, if you are eager to make it work.

As long as advisors (and product providers) only go through the motions of conforming without the required change of heart, the authorities will forever be playing catch-up and trying to plug loopholes.

This is identical to the challenge faced by SARS in creating the required tax morality. They have to accept that there will always be those prepared to take chances, while the majority will be keen to play by the rules, provided it is fair, and applied fairly.

Re-visiting Covey’s seven habits may be the right place to start, although it may be a little late for “Begin with the end in mind.”