Industry challenges and opportunities guide young advisers to success

01 November 2013 Anemike Swart, Autus Wealth

Being a young financial advisor entering the financial services industry in South Africa, has its fair share of challenges, but definitely some advantages too. The profession is intellectually stimulating, there is a degree of independence and it is financially rewarding.

Although this sounds wonderful, these perks come with significant responsibility. The advisor is ultimately the master of his own destiny, determining the amount of energy, learning, focus and hours spent on becoming the real deal. This is, ultimately, the single biggest determining factor of success or failure.

Winning trust isn’t easy

Being a young advisor carries with it the challenge of winning the trust and support of clients. History suggests that clients tend to have more faith in older advisors. Many years of experience certainly helps in this regard, and I have an enormous amount of respect for the older successful advisor.
Having said that, age and experience in itself does not automatically make someone a better advisor. The type of person who enters the industry today is a completely different person than 30 years ago.

In the past, legislation - or I would rather say the lack thereof - basically made it possible for anyone to enter the industry. Unqualified individuals were allowed to render financial services, notwithstanding their complete lack of qualifications and the right kind of experience.

A few years into a new legislative and regulatory framework, guidelines and selection criteria, and we see that successful new entrants to the industry are B.Com graduates, often with an honours degree or post graduate qualifications in financial planning.

Having the advantage in the industry is not easy

The CFP® accreditation, for example, is something young advisors strive to gain as it gives them an edge over those without it. Being registered with, and governed by a professional body such as the Financial Planning Institute of Southern Africa (FPI), and adhering to their Code of Ethics adds a huge amount of trust to the clients of those practitioners and ultimately to the profession. It also assures clients that they not only are protected by legislation, but receive a professional service.

Staying up to date and constantly educating and empowering oneself is crucial. Legislation is changing regularly and the product universe is constantly evolving. Advisors need to be able to always provide the best possible solution to their clients. Financial planning is not just about selling a product, but rather about constantly rendering high quality financial advice based on a specific process. This mindset will also empower the young advisor and help sustain his/her business.

Industry concerns

To have a business continuity plan is compulsory, and is required by the FSB in order to receive a clean audit. This is a great concern as a lot of independent advisors who operate on their own in the industry, do not have a feasible continuity plan protecting their clients in the event they should retire, die, immigrate, or exit the industry.

It is also of major importance for clients to ensure continuity in their planning process and to ensure they can revise and modify their plan over the long term to adapt to any changes.


All these changes create a great opportunity for young advisors who can step in to ensure continuity for older advisors and their businesses. Conversely, the continuity requirement is also a great challenge for the independent young advisor looking to establish his or her own business’.

The opportunities are limitless. To be part of the Young Advisor’s Forum is a unique chance to meet other young advisors, to learn from one another’s experience and earn continuous professional development points. This may well prove over the long term to significantly enhance the offering of advisors to their clients and in so doing, assist in building sustainable and profitable businesses premised on sound and proper advice and not on selling products.
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