Financial advisors urged to collaborate for success

South Africa’s small, medium and micro-enterprises (SMMEs) will be the principle drivers of the change needed to restore the country’s economic prospects. Peter Olyott, president of the Financial Intermediaries Association of Southern Africa (FIA), told delegates at the association’s 2019 Advice Summit that government’s role was to facilitate this change. He added that the summit theme of “collaboration breeds success” was chosen to illustrate the need for each of the association’s members to work together with one another, the industry and government to achieve common goals.

Olyott’s sentiments were echoed by keynote speaker, Roelf Meyer, who addressed the summit in his capacity as co-founder of the Public Private Growth Initiative (PPGI). He observed that the private sector had a better chance of growing the economy and creating jobs if government removed inhibitors to growth and said that it was up to business to tell government what these obstacles were. Meyer, who was among the team of negotiators that carved out South Africa’s Constitution in the early 1990s, is a strong advocate for collaboration between the public and private sectors. He said that the financial services sector was making a major contribution to the PPGI process alongside other critical sectors such as agriculture, automotive and tourism. 

Collaboration versus collusion 

It is difficult for competing firms to promote collaboration against the backdrop of corporate mistrust and the no-nonsense approach of the Competition Commission of South Africa. Competitor firms are often concerned about giving away their intellectual property or trade secrets consequential to working with others towards a common goal. There are also many who conflate ‘collaboration’ with ‘collusion’ and fear working with others lest they suffer a similar fate to the various industries that have been fined for cartel-like behaviour, price fixing and other anti-competition transgressions in recent years. But those who remain true to the dictionary definition of the word have little to fear from the authorities. 

The Cambridge Dictionary defines ‘collaborate’ as a noun, meaning the “situation of two or more people working together to create or achieve the same thing”. It is a perfect descriptor for an initiative through which an intermediary association engages with other associations, product providers and / or government on behalf of its members to find solutions to common challenges facing the financial services sector and the broader economy. The FIA is currently collaborating with various financial sector stakeholders on three fronts. The first is that of professional development; the second is that of broad-based transformation; and the third is transformation of business models. “If we continue to conduct our practices as we do today, we will not be able to bring in the ‘bacon’ a decade from now,” said Olyott. 

Meyer told the intermediaries in the room that they were sitting on a wealth of entrepreneurial opportunities. SMMEs will generate the economic growth and new jobs that South Africa so desperately needs,” he said. He was confident that the domestic economy had reached a turning point insofar its economic trajectory and encouraged those present to work hard to unlock the huge potential in developing and supporting the so-called township economy. Despite his upbeat assessment those making a living from financial advice will have their work cut out for them unless South Africa’s economic prospects improve. 

In his presentation titled ‘2020 Vision: In sight of the new deal’ Dr Adrian Saville, Chief Executive at Canon Asset Management, said the country was nearing a stage where the economic reality would call the politicians out. He warned that the economy exhibited three features that were present prior to the ‘Arab Spring’ moments in Egypt and other countries, namely a high proportion of youth in the total population, high unemployment and inequality. “We exhibit one of the highest inequalities in the world whether you measure balance sheets, education or incomes,” he said. The solution does not lie in stronger growth; but in long-overdue restructuring. 

He cannot fix it alone 

Dr Saville observed that the “he can fix it” mantra that grew out of President Cyril Ramaphosa’s election needed fixing. What South Africa should be saying is: “He cannot fix it alone – he can only fix the country with help [from the private sector]”. This reaffirms the need for collaboration between the public and private sectors introduced by Meyer. The FIA has already bought into the collaboration ideal and has built this into its overarching strategy. “We need to pull together to tackle the myriad challenges facing our industry and the country at large,” said Lizelle van der Merwe, CEO at the FIA. She added that the association would not succeed in its various initiatives without collaboration from all stakeholders. 

Dr Saville closed his tough assessment of the country’s economic prospects with an appeal to government to behave rationally in solving high cost problems such as energy provision and universal healthcare. “South Africa does not need [more] money,” he concluded. “We need to do sensible things with the resources we have through collaboration and action”. 

Editor’s thoughts:
The FIA Advice Summit theme of “collaboration breeds success” encourages stakeholders in the financial services sector to work together on projects of mutual interest. Would you agree that broad themes such as professional development and transformation are best solved collectively? Add your comment below, or send it to editor@fanews.co.za.