The South African financial services industry is going through some major changes. New pieces of legislation, as well as the previous outlook of advisers, has shaped the current changes in the industry and will have a significant role to play in the industry’s future development.
This presents advisers, who are hoping to capitalize on any opportunities to become successful in their own right, a unique selling point which may see them able to achieve true financial freedom for their clients through a number of different product offering options.
Be wise to the changing environment
Sydney Sekese, CFP ® professional, Old Mutual Senior Investment Specialist, says that this can be achieved by being aware of the ever-changing landscape.
“The greatest challenge in our industry is that our services are intangible and therefore creates a challenge when one has to demonstrate value to a client. The industry landscape has evolved over the years whereby most service providers, especially intermediaries, were
driven by commission to ensure survival of their entities. As a result, these individuals or entities became product pushers and they would recommend products with high commissions.
“The industry is evolving and there is a move towards the scrapping of commission, and advisers are required to migrate from this dispensation into the advice-driven environment,” says Sekese. This movement is adopted from the recently implemented legislation in the UK, namely Retail Distribution Review (RDR).
Sekese adds that the profession is in need of new advisers to fill both the expanding market and the shoes of retiring advisers. The demand for financial advice is increasing as Baby Boomers approach retirement and seek help getting there. "If you are a veteran in the industry, you need to attract fresh new talent for your practice. Providing a mentoring environment is important to help draw young professional, allowing them to learn and grow with the help of your expertise.”
Seeking reinvigoration
Since the beginning of 2013, the Financial Services Board (FSB) has been on a mission to implement new legislation which would, in their minds, significantly improve the industry. This has been met with some criticism by insurers, brokers, advisers and intermediaries who feel that the industry is under threat of becoming over regulated.
However, there is a need for stricter laws and enforcement measures to be implemented in the industry. One only has to look at the determinations of the Office of the FAIS Ombud regarding the conduct of certain industry participants to prove this.
This sentiment is echoed by Sekese. “The financial planning Industry needs to continuously improve its image by ensuring that professionally qualified individuals provide credible services. The industry also needs to raise awareness in the community they serve. There is a potential for this industry to be elevated to similar status of other industries such as medical, law, accounting and engineering. Through hard work of institutions like the Financial Planning Institute (FPI), the industry can be reinvigorated and become a force to be reckoned with.”
Achieving success
In addition to being aware of the changing environment and coming to terms with the new pieces of legislation which is being imposed by the FSB, Sekese points out that there is a simple formula for achieving success in the industry.
“My career spans over a period of two decades. I have been exposed to various aspects of the financial services industry; focusing on the retirement and savings environment. During this period, I have been exposed to the actuarial, administrative, marketing and advisory aspects of the industry. As a result, I have a credible profile that can be used to provide professional services to various stakeholders. It is this professionalism that has made me a successful individual,” he says, adding that diversification is the key to a successful adviser.
“My success has been made possible by sticking to simple principles and values. The four great principles I adopted over the years include: preparation, patience, discipline, decisiveness and contentment,” concludes Sekese.
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