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Regulatory frameworks in South Africa’s financial sector have evolved significantly, with one of the most critical changes being the introduction of the Twin Peaks model under the Financial Sector Regulation Act (FSRA). This structure fundamentally reshapes the regulatory landscape, influencing how financial advisers operate and comply with market conduct and financial stability requirements.

What is the Twin Peaks model?

The Twin Peaks model divides financial sector oversight into two distinct regulatory bodies:

  • The Financial Sector Conduct Authority (FSCA) – Oversees market conduct, ensuring financial service providers act in the best interests of clients, promote transparency, and uphold fair business practices.
  • The Prudential Authority (PA) – Ensures the financial soundness of institutions such as banks and insurers, focusing on stability and risk management.

Previously, multiple regulators handled different aspects of financial oversight, leading to gaps and inefficiencies. Twin Peaks consolidates oversight, reducing regulatory arbitrage and improving consumer protection.

How does this impact financial advisers?

For financial services providers, the most significant changes are:

  • Stronger focus on client outcomes – Compliance is no longer just about ticking boxes; advisers must prove they are delivering fair treatment and positive outcomes for clients.
  • More oversight and accountability – The FSCA has greater authority to enforce conduct standards, requiring advisers to maintain robust governance and risk management frameworks.
  • Alignment with global best practices – The Twin Peaks model brings South Africa in line with international regulatory trends, ensuring a more stable and transparent financial services industry.

Adapting to the new regulatory landscape

To stay ahead in the Twin Peaks environment, financial advisers should:

  • Strengthen compliance programmes to meet the FSCA’s evolving market conduct standards.
  • Enhance client engagement strategies to demonstrate ethical practices, transparency and enhanced client experiences.
  • Stay informed about COFI developments and FSCA expectations to ensure continuous alignment with regulatory requirements.

The bottom line

The Twin Peaks model isn’t just about compliance. It’s about fostering a stronger, more client-focused financial services industry. By understanding the regulatory landscape and adapting business practices accordingly, financial advisers can ensure they remain compliant while building trust and long-term success. An alternative to this is partnering with advice networks – such as Graviton – to access the frameworks and practices currently supporting independent financial advisers during this time of change.

Are you prepared for the full implementation of COFI under Twin Peaks? Now is the time to refine your approach and ensure your practice is ready for the road ahead.

 

 

 

Graviton Financial Partners (Pty) Ltd is an authorised financial services providers in terms of the Financial Advisory and Intermediary Services Act,2002. The information in this article does not constitute financial advice While every effort has been made to ensure the reasonableness and accuracy of the information  contained in this article (“the information”), the FSP, their shareholders, subsidiaries, clients, agents, officers and employees do not make any  representations or warranties regarding the accuracy or suitability of the information and shall not be held responsible and disclaim all liability  for any loss, liability and damage whatsoever suffered as a result of or which may be attributable, directly or indirectly, to any use of or reliance  upon the information.