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Shaping a sustainable future for financial and risk advice professionals

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  • Media Release
  • FIA

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Johannesburg, 23 October 2024: Diversity and inclusive growth are essential to improve access to financial services and are among the top objectives for South Africa’s finance and risk advisers as they continue to build a resilient and sustainable financial sector.

“The insurance and investment landscapes are evolving, driven by shifting consumer expectations, technological advancement and a growing emphasis on sustainability; we need a more equitable society that ensures we have more customers to advise and distribute financial solutions to,” said Butši Tladi, President of the Financial Intermediaries Association of Southern Africa (FIA).

Butši, who is also the sitting President of the World Federation of Insurance Intermediaries (WFII) was opening the 2024 FIA Advice Summit, held on 16 October at the Sandton Convention Centre, Johannesburg. The hundreds of intermediaries and financial services stakeholders in attendance were treated to a stacked programme spanning themes such as climate change, cover subjectivities, insurance protection gaps, skills development and, of course, technology.

Held under the theme ‘forging the future, now’, the summit serves as a platform for financial and risk advice professionals to reflect on their operating environments, and actively shape the world they want to bequeath to future generations.

“This platform for dialogue and innovation has been carefully curated to address the challenges and opportunities we face in a rapidly changing landscape; by embracing diversity, not just in our teams, but in our ideas and approaches, we will ensure the sustainability of our industry,” Butši said, challenging the audience to engage openly, share thoughts and challenge the status quo.

The 2024 FIA Advice Summit took place less than seven weeks after the 1 September 2024 implementation of National Treasury’s two-pots retirement solution. The FIA President commended the financial service sector for the dynamism and resourcefulness that ensured it had put systems in place to administer the flood of two-pots withdrawal requests.

“Over the last few weeks, the industry has implemented one of the biggest fundamental changes to our pension system; the solution aims to help the current generation of workers to ensure that their retirement is taken care of, so that the burden does not fall on future generations,” Butši said.

Financial product suppliers and retirement fund administrators have leveraged technology to significantly reduce the processing time on withdrawal applications, as evidenced by statistics provided by the South African Revenue Services (SARS). By 11 October, the revenue collection agency said it had received over 1.2 million applications for tax directives for withdrawals, involving a total gross lumpsum of R21.4 billion.

The financial services sector deserves praise for its administrative prowess, but there are still plenty of opportunities for intermediaries to educate consumers on prudent financial behaviour. Butši noted that South African investors had “a very interesting way of defining what an emergency is”, and hoped that the money being withdrawn would be applied to genuine emergencies, as the system intended.

The intermediary trade association ensured that both domestic and global regulators had a place at its 2024 summit, with the Financial Sector Conduct Authority (FSCA) presenting its views on the so-called ‘cover subjectivity’ problem. For some context, many short-term insurance brokers have raised concerns over the clarity and consistency in insurance policies issued by the country’s large underwriters. There are concerns that these uncertainties taint the risk advice process.

Jonathan Dixon, Secretary General of the International Association of Insurance Supervisors (IAIS) offered a pre-recorded explainer of the insurance gap paradigm, and offered some global insights on how the industry should proceed to narrow the gap between economic losses and insured losses. His comments were timely given the massive losses caused by Hurricane Helene and Hurricane Milton in parts of the United States.

The impact of artificial intelligence (AI), generative AI and other emerging technologies featured strongly on the programme too, with both panel discussions and presentations exploring how the insurance and investment industries might deploy AI solutions to address challenges. The clear message: technology must be used to reduce administrative complexity, and free up advisers’ time for face-to-face adviser-client interactions.

The FIA noted that intermediaries, product providers and regulators would continue to work together to forge new pathways and create solutions to serve financial services clients. “Each of us has a role to play in shaping an inclusive, resilient and sustainable future,” Butši concluded. “Let’s harness the collective wisdom and experience in the intermediary sector, draw from our diverse backgrounds and innovate and inspire each other on the journey ahead.”

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