Advisers must play a more proactive role in clients’ lives


Head of Advice at Old Mutual Personal Finance, Lizl Budhram, says advisers need to help clients to navigate difficult and uncertain economic conditions in a much more proactive way. According to Budhram, regular email contact with clients can reframe the impact of major political or economic events and help clients to make more informed financial decisions.

“Small but effective solutions are proving valuable to customers and essential to help them stay on track. In 2019, advisers will need to preempt how customers may respond to external events and take proactive steps to prevent impulsive responses. Explore alternative solutions together, for example, and be the voice of calm to counteract the urge to act rashly,” she says.

The past year has demonstrated the growing need for financial advisers to maintain an ongoing relationship with their customers, providing support, advice and insights that go beyond a singular annual check-in.

Budhram says that the line between politics and economics was very blurred in 2018, with political events having a heightened impact on market performance. “The immediacy of the fallout from global economic and political events is also accelerating; the ongoing trade war between the US and China has impacted the rand as investors shy away from emerging markets. When customers are impacted by global events, such as an increase in oil price resulting in a petrol price increase, advisers need to play the role of coach, steering them through a challenging financial playing field.” 

Locally, the phased implementation of the Retail Distribution Review (RDR) continues. “Across the industry, the implementation of RDR has demanded a lot more work from advisers, challenging them to add tangible value to their customer interactions. Typically, given the changing landscape, those advisers who partnered with a reputable brand to ensure improved service and access to training were less impacted as they could access a measure of support and resources.” 

Budhram believes that the regulatory reforms are building credibility and trust across the industry. “While initially demanding of financial advisers, the formalisation of financial advice through RDR will ultimately strengthen the overall level of service being offered by advisers.

“Simply put, this is changing the adviser value landscape – increasing the adviser output, adding value to the industry and most importantly the customer, going forward.”

Budhram predicts 2019 will present more detail and certainty on new RDR regulations and related new opportunities for advisers. “The industry is still negotiating with the Financial Sector Conduct Authority (FSCA) on a number of issues. This month, the FSCA released the draft Conduct of Financial Institutions (COFI) Bill for industry comment. The industry is currently reviewing the Bill and carefully analysing the implications and likely impact on financial service providers, advisers and customers. 

“This is a very important step forward in the regulations and intended transformation of the financial services industry. Ultimately, all parties are committed to managing the changes brought about by RDR and ensuring that these changes benefit the industry and the customers we serve.”

She urges financial advisers to stay up-to-date with the regulatory changes, and to closely watch current events such as the general election, ratings agency reviews and further disruption in Eskom’s electricity supply. 

“In essence, advisers need to be fully prepared for any changes and uncertainty that lie ahead. Central to this is customer-centricity: how do we help our customers stick to their plan, how do we guide them through the challenges and secure their positive futures. Proactive thinking and the right partnerships are key to providing invaluable service in an evolving environment. Advisers need to ensure they have sufficient support in their practice and the right solutions in place. Maintaining good relationships with customers is vital.  Manage customer anxiety during times of economic pressure by reminding them of the value of a long-term perspective. The mantra for 2019 is simple: Don’t change long-term goals to meet short-term volatility.”