The role of the internet and the desire of the public to become more educated on the financial services industry are having a significant impact on the industry.
Client’s desire for financial wellness is a trend which is shaping the industry and will have a significant impact on the role of the adviser in the industry. Change is constant, and if advisers are reluctant to embrace these changes, they will struggle to find the success that they seek in generating new business.
Follow the trends or become a square
Some advisers in the industry have been in the industry for many years and have a lot of experience. This experience has taught them to do business in a particular way. Change then becomes a frightening prospect, but Ntai Phoofolo CFP®, Private Clients Wealth Manager at Standard Bank, points out that the existing business model need not have major changes.
“I believe the industry has matured over the past decade. Financial advisers have realised the need to assist the client by not just utilising good selling skills, but incorporating more technical knowledge to address a client’s need. Clients can quickly pick up if a financial adviser is knowledgeable or not. The less knowledgeable the adviser, the less trust the client will probably have in him. In my view, we are just responding to the needs of clients, taking into account their increased levels of knowledge which demand more of us as financial planners,” says Phoofolo.
He adds that new regulations, social media and client’s increased knowledge of financial planning, have forced everyone to change their approach. Legislation such as the Financial Advisory and Intermediary Services Act of 2002, have made financial advisers more accountable than ever for the advice they provide to clients.
“Social media has made it much easier for clients to share their experience, good and bad, about and with financial advisers, keeping us on our feet. The media has also helped in educating clients about their rights, what to expect of financial advisers and remedial actions in the event of a client dissatisfied with their financial adviser. All of this encourages us to be aware of our obligations, put our clients’ interests first and continuously up skill ourselves to be in a position to adequately advise clients,” he says.
Promoting the industry to its rightful place
While the insurance industry does play an important role in society, Phoofolo points out that it can be argued that the industry does not receive the recognition it deserves when compared to other industries such as the legal and medical industries.
“Where we want to be as an industry, is to be seen in the same light as other traditional professions such as lawyers and doctors. In this regard, I think the Financial Planning Institute (FPI) have put in an enormous amount of effort in ensuring clients are aware of their rights, and financial advisers are aware of their obligations. One of the biggest accomplishments of the FPI is their promotion of the Certified Financial Planner® professional (CFP®) mark, and ensuring that every up and coming financial adviser aspires to become a CFP® professional. The industry will therefore continue to grow and mentor qualified financial advisers who are competent and ethical, in the interests of our clients,” he says.
But the FPI is not the only role planner in achieving this ideal. As before, the role of the adviser will be vital in promoting and growing the industry.
“The best we can do is to conduct ourselves in terms of our Code of Ethics and Code of Conduct. If we live by these principles in our engagement with clients, we will encourage trust in CFP® professionals and ultimately have clients insisting on financial advisers being properly qualified and certified,” concludes Phoofolo.
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