Book review: Mastering key elements to RDR by Kobus Kleyn

The South African financial services industry is currently going through a spate of regulatory reform the likes of which it has never seen or experienced in the past. Predictably, this has caused a little bit of a stir in the industry and has forced brokers, advisers, intermediaries and Certified Financial Planner’s (CFP) to have a careful look at their business models and how they interact with their clients.

To say that there is a fair amount of confusion in the industry is a bit of an understatement. While being forthright about the level of regulatory reform, the Financial Services Board (FSB) has been a bit vague on how this will impact the industry. 

Mastering Key Elements to RDR, written by Kobus Kleyn CFP, hopes to clarify some issues surrounding a key piece of regulation, the Retail Distribution Review (RDR). 

The book explores a number of key topics related to RDR. One of the criticisms that the industry has about RDR is that those affected by it battle to see the potential value that it will add to the industry.

Klein believes that a key component of the post-RDR environment would be qualifications, experience, credentials and affiliations which should form part of any financial intermediary’s value proposition to prospects and clients. He adds that any financial adviser wanting to be very successful post RDR, will have to ensure differentiation and a value proposition way above what we believe is acceptable currently. 

Klein is a firm believer in professionalism and is outspoken throughout the book about the valiant efforts of industry bodies to professionalise the financial services industry. This will only be further enhanced through the RDR process. 

Already a CFP, Klein believes that financial planners will play a key role in the advice provided in a post RDR world. He further points out that the FSB will most likely be engaging with the Financial Planning Institute of Southern Africa to refine the definition of what a CFP actually is and the advice that a CFP will offer. 

One of the other key elements that Mastering Key Elements to RDR discusses is the remuneration issue. This has been the single most sensitive issue of RDR as all parties involved will need to redefine how they earn a living. 

The problem with this is until advisers, brokers, intermediaries and CFPs start earning a living in a post RDR world, much that is said about this is like looking into a misted up crystal ball. 

Klein does venture into this a bit and suggests that South Africa could be the first country in the world to ban some commission on risk products; and therefore, we will become the global guinea pigs in this regard. Because of this, we will probably have to learn hard lessons along the way due to this aggressive remuneration proposal from the FSB. 

The book is definitely a must read for professionals who want to successfully navigate RDR. Klein has spent a number of years in the industry and has a keen insight into how the industry currently works and will work in a RDR world.  A Kindle version of the book is available on Amazon at a cost of $9.15. There are hardcopies of the book available and interested parties are encouraged to contact Klein at kobus.kleyn@liblink.co.za.