Transparency and trust are essential to ensure fair outcomes for consumers through the financial advising process. This was the message from the Financial Intermediaries Association of Southern Africa (FIA) to the 2025 FSCA Industry Conference, held in Johannesburg, 19-20 March 2025.
“Our members are spread across the financial and risk advice disciplines, ranging from small to large to international businesses, so we are able to offer quite a diverse view,” said Lizelle van der Merwe, during a panel discussion on the benefits of collaboration between financial services providers (FSPs) and regulators.
Van der Merwe identified ‘disclosure and transparency’ as a golden thread binding all stakeholders in the broader financial services sector including consumers, intermediaries, product suppliers, and the Twin Peaks regulators. “Clients want to know what they are paying for and how their funds are being invested, and this desire is common across the advice disciplines,” she said.
The conference was themed ‘Embracing the evolving financial sector landscape, improving industry practices for fair customer outcomes’. As such, the FSCA ensured unique insights by stacking this panel with executives from two leading diversified financial services providers alongside the FIA and representatives from the Association for Savings and Investment South Africa (ASISA) and the Institute for Retirement Funds Africa (IRFA).
The FIA acknowledged the increased uptake of artificial intelligence (AI) and related technologies by intermediaries and product suppliers, saying that it was necessary to meet evolving consumer expectations – and they maintained that technology should enhance rather than replace the human touch. “Our customers no longer respond to generic solutions; they want us to consider and respond to their financial ambitions and goals, appropriate to their life stages,” Van der Merwe said.
Hyper-personalisation stood out as a common theme to distinguish product and service offerings to both consumers and intermediaries. For advisers, the battle extends beyond leveraging technology to improve their advice processes, to a more comprehensive understanding of the consumer, their clients.
Given the current economic challenges, many clients are experiencing increased financial strain and advisors recognise the pressures they face. “Consumers are under huge financial pressure,” said Van der Merwe. “Our members are increasingly seeing emotionally driven choices that affect decision-making across the healthcare, insurance, and investment disciplines.” She warned that consumers are making short-term decisions that undermine long-term financial wellbeing, sacrificing future financial goals to relieve today’s financial pressures.
Commenting on regulation, the FIA CEO commended the Financial Sector Conduct Authority (FSCA) for entrenching the Treating Customers Fairly (TCF) principles into the regulatory framework. The consensus is that a TCF approach to financial services is good for business and consumers. The authority was also praised for its ongoing efforts around consumer education and financial literacy. There are, however, regulatory functions that South Africa’s intermediaries would like to see improvements in.
These areas span complexity, enforcement, innovation, and the ever-expanding regulatory burden. The complexity and scope of regulation is making it tough for small practices to comply. “Small businesses play an important role in job creation and economic growth; but to digest and translate some of the financial sector regulation into business language is a huge challenge,” Van der Merwe said.
The association also acknowledged the regulator taking a strategic approach to enforcement, with much of the two-day FSCA Industry Conference focused on financial and human resource capacitation at the FSCA and Financial Intelligence Centre (FIC). Overall, intermediaries want a consistent approach to enforcement across the criminal and financial services landscapes.
The advisers, brokers, and intermediaries who make up the FIA membership play an invaluable role as the first point of contact between product suppliers and consumers. As such, they are well-positioned to give insights on how complexity – whether in product design or regulation – impacts their individual or commercial clients.
“Simplifying the regulatory framework is critical, especially for smaller advice businesses that lack the resources to navigate complex legal dispensations,” Van der Merwe said. “The regulators have a responsibility to demystify financial sector laws and regulations to the benefit of consumers and those advising consumers on complex financial products and services.”
Going forward, the association advocates for collaborative, solutions-based engagement between the financial services sector and regulators to ensure sustainable outcomes for consumers. “Working together, business, government and the regulators can position South Africa as the gateway of financial services into Africa – enhancing our prospects for economic growth,” Van der Merwe concluded.
