Walk tall despite the perils at your door
Joanthan Faurie, FAnews Journalist
Benchmarking is an important task to carry out as it forms a foundation for the year ahead, and provides key insights on where good business can be done as well as how challenges can be overcome.
This is an important task to carry out in the South African financial services industry in a year where there have already been promises of major change. On the whole, the South African industry is a solid, well performing industry which is competitive and comparable with the best in the world. However, our current economic environment has set the scene for a challenging year, and we need to overcome it.
Strength in numbers
FAnews spoke with the CEO of the Financial Planning Institute, Godfrey Nti, who said that the life industry is in a healthy state, which is a testament to good work in the industry.
“According to the FinScope South Africa 2015 consumer survey, close to 18.5 million people are insured. However, there has been a decline of approximately 4% in insurance in the life and investments sector. This is driven by consumers considering cancelling their insurance or investment policies with the aim to pay back their current debt. In light of the industry focusing on financial inclusion, promoting the importance of insurance to consumers is key and an area the industry should improve on,” says Nti.
Technology speed bump
He added that we also need to be aware that consumers of financial services are becoming more financially and technologically savvy; which places financial planners and advisers under pressure to ensure they remain relevant.
“2015 has seen many activities around robo-advice, which is a result of more consumers looking to service their own needs through electronic platforms. A strong value proposition is critically important for any client dealing with a financial planner and financial adviser,” says Nti.
Embracing technology and incorporating it in your business is the one thing that will set you apart from thousands of other financial advisers in the industry. You will attract clients for the right reasons – they will come for your service, your superior knowledge and your ability to assist them in achieving their life goals.
Customer is king
In what has become a mainstay in the industry, insurers and advisers are coming to terms with Treating Customers Fairly (TCF) and aligning themselves with objectives that places enhanced powers at the doorstep of the client.
There have been some queries about the true value of TCF and whether the industry has changed with its presence. Nti points out that there is no question that it has and that it will continue to do so in the future.
“Though early days, it is encouraging to see that a sizable section of the industry is starting to take issues of creating a culture of client centricity, a cornerstone of TCF, seriously. However, one still runs into some fairly significant industry players who continue to regard TCF as just another regulation that their compliance officers will deal with while they focus on business. They could not be more wrong and the clock is ticking.”
For professional financial planners who followed the spirit of the Financial Advisory and Intermediary Services Act, and particularly CFP professionals, TCF merely reinforces and supports what these professionals were already doing.
Stay on point
With the economy being the way that it is at the moment, added to other challenges such as competing for price and the rise of the robo adviser, it is vital that advisers do their best stay alert and in tune with their client’s needs.
“With change being the only constant factor within the insurance industry and the manner in which consumers adapt to these changes, it is vital for the industry to use foresight to remain a leading entity. Being reactive to the surrounding environment is a luxury our industry cannot afford. As such, we need to work on foreseeing changes and key trends in order to seize the opportunities they bring ahead of time,” says Nti.
Editor’s Thoughts:
This is a key period of time for the insurance industry. Now, more than ever, clients need financial security so that if the country’s economic situation gets worse, they are protected. Perhaps this is a time to show your value to your client so that they can say: thank goodness for my adviser in my time of need. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts [email protected].
