Intermediaries are not fat cats

24 August 2006 Angelo Coppola

Financial literacy is an issue in a country where functional literacy remains at low levels, and Gavin Came, from Sasfin and representing Safsia, says that advisors, whether they like it or not, are trainers in financial literacy, during their interactions with consumers.

Mechanical compliance and disclosure are not mutually interchangeable. He cited his dealings with an offshore asset manager, which required that two documents totalling 76 pages had to be completed which, as Came quite rightly says, is not disclosure its burocracy gone mad.

Came was speaking at the LOA convention last week.

And contrary to popular belief Came says that the intermediaries are not fat cats. He called for extreme sensitivity during the transition phase (the commission debate), as a potential new revenue stream is introduced. It's not about the life offices expenses, but more accurately its about the livelihood of the broker.

Looking at the product provider sector, and on the question of competition, Came is a proponent of getting more product providers licenced. This will be good for the consumer as prices and disclosure will work in favour of the consumer.

His analogy is that if the Department of Health hadn't limited the number of pharmacies in a specific radius of each other the medicine prices would have come down.

On the question of product design Came says that people who earn less than R200 000 per annum, shouldn't buy or be sold an endowment. It's indefensible.

Editor's thoughts
* Some fresh and publicly expressed thoughts from Came, although there was a health warning, in that some of his thoughts he said were his own, and not those of the organization he represented Safsia.

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