SA well-positioned for financial advice excellence
Did you know that South Africa boasts the sixth highest number of Certified Financial Planner (CFP®) professionals worldwide? Your writer did not. This uplifting fact was shared early on during the 35th annual convention of the Financial Planning Institute of Southern Africa (FPI), held over two days in Cape Town and online.
Empowering financial planners
Themed ‘Cultivate growth: harvest excellence’, the event offered an exceptional presenter line-up aimed at empowering financial advisers and planners to take their practices to the next level and improve financial planning outcomes for their clients.
“I deeply value the work of our profession, and I deeply value the work that all of you are doing to help ordinary individuals and families make decisions about their financial planning; I am absolutely dedicated to seeing the financial planning profession grow both here and further afield,” said Kirsty Scully, CFP® and chairperson of the FPI, during her brief welcoming address. She celebrated the 5.3% growth in global CFP numbers in 2023 and reminded the audience that there were now over 5 000 financial planners plying their trade in Southern Africa.
The FPI chairperson referenced a 15-country, 15 000 respondent global survey conducted by the Financial Planning Standard Board (FPSB) to reinforce both the need for financial advice, and its value. The survey identified the rising cost of living as the most common financial concern among households, lamenting the corrosive effect of inflation on investments and savings. “The good news is that the demand for financial planning is growing; 72% of those who have never received financial advice said that they were considering seeking some,” Scully said. Households will be holding thumbs their advisers can deliver inflation plus results over the long-term.
Certified Financial Planner for the win
The survey revealed that individuals who work with CFPs believed they had a better quality of life than those who did not, and that the value they derived from working with CFPs far exceeded the cost. “Finally, the survey showed that 98% of people trust their certified financial planner to act in their best interest; that puts a huge responsibility on our shoulders as financial planners … [we have] an absolute obligation to conduct ourselves with the utmost professionalism,” Scully said. The FPI then extended an open invitation to its membership to join forces to make the upcoming World Financial Planning Day, 9 October 2024, a resounding success.
The morning session of the first day of the 2024 FPI Professional’s Convention focused on soft skills under headings like ‘creating a great company culture’ and ‘unlocking the power of connection’. Your writer will share insights from these thought-provoking ‘sets’ in a future newsletter; but for today we direct your attention to a presentation on executive-level ‘learnings’ relevant to financial advice and planning practices. Jeanette Marais, Momentum Metropolitan Group (MMG) CEO, was asked to reflect on her first 12 months at the helm of one of the country’s largest asset managers and insurers.
The first lesson was for financial professionals to think carefully about what success means to you, and to your clients. Marais observed that it took years of hard work to achieve success, and that there were many mistakes and reflections along the way. She noted that success stemmed from continuous effort before offering a more philosophical observation about what lies in wait after you achieve success. In her case, rising to the top at MMG took 30-years; but reaching that point reset the ‘experience’ clock. You literally start all over again. Your writer onboarded this lesson as success being a continuous cycle of goal setting, goal attainment and setting new goals.
No person is an island
The second lesson stems from what your writer calls the ‘no person is an island’ paradigm. “No leader is ever on their own; whether you are the president or the CEO of the biggest company in the world, you cannot do it without a team,” Marais said. “You must make sure that you gather the best team you can possibly have around you, and then motivate them [to become] what I call a force multiplier. The MMG CEO argued that a strong team could multiply a leader’s belief, culture and drive throughout the organisation. You should know all the cliches by now, dear reader: ‘teamwork makes the dream work’ and ‘there is no “I” in team’.
A third important lesson is to consider external feedback, both critical and positive. “Feedback takes you out of your comfort zone, [it reinforces things] that you kind of know but maybe do not feel like acknowledging,” Marais said. Critical feedback should force you to reassess the beliefs you have about yourself or your practice, and perhaps tackle some of the hard truths about your business. In Marais’ case, she chose to delve into the 40-45% discount to embedded value that has been accepted as ‘normal’ for South African insurers’ share prices. Instead of accepting this as gospel, the CEO commissioned a piece of research to find out why this discount persists.
“Being a leader in your business is an infinite game,” said Marais, framing this lesson in the context of the bestseller by US author and inspirational speaker, Simon Sinek. The book is premised on business and life having no finite end-goal; it demands that you give your best every day. Shifting focus to growth, Marais singled out independent advice and independent financial advisers as key differentiator in the asset manager and insurance constructs. “If you grow, and we have got a good partnership, then we will grow,” she said. “We are only as good as the last interaction with you, your office or your client”.
Leading by example
Some final tips to advisers and planners keen to take their practices to the next level included to be authentic and to leverage the ripple effect of strong leadership. Marais observed that over time, an organisation begins adapting to the ‘language’ their leaders speak. “The power of being a leader in an organisation is to realise that it is not just what you say, but what you do, that creates the ripple effect … people will only believe you if they can see that you live what you say and that you take it seriously,” Marais said.
Commenting on future interactions between advisers and product providers, the MMG CEO said, “the more complex [financial products become], the bigger the need will be from clients to receive face-to-face advice”. She singled out human-based adviser-client relationships and simplified, impactful client experiences as integral components in the future financial advice landscape. The challenge, should you accept it, is to always see the human at the other side of every financial transaction.
Your writer will close this piece with the only segment of the presentation to receive a smattering of applause from the in-person event attendees. “Our industry is too complex; I dream of the day when a contract to a client has one page, in big print, that says, ‘here is the fine print, read this page, it is all you need to know’,” Marais said. She added that while compliance was important, the overreliance by the industry on small print was one of the reasons clients lose faith in the industry.
Make purposeful impact, every day
Marais wrapped her presentation by encouraging financial advisers and planners to make purposeful impact in the lives and financial wellbeing of your clients.
Writer’s thoughts:
One of the challenges to large asset management and insurance brands is to promote truly independent financial advice given the obvious market share and profit conflicts. Do you think our leading insurers do enough to promote true advice independence? Please comment below, interact with us on X at @fanews_online or email us your thoughts editor@fanews.co.za.
