The Conduct of Financial Institutions (COFI) Bill is reshaping the regulatory landscape for financial advisers in South Africa. But while COFI introduces new structures and oversight, many fundamental aspects of financial advice remain unchanged. Understanding this balance is key to ensuring a smooth transition.

What’s changing?

COFI is designed to create a more client-centric regulatory environment, emphasising principles-based compliance over rigid rules. Key changes include:

  • Increased oversight: The FSCA will play a more active role in ensuring financial advisers are delivering fair client outcomes rather than simply following compliance checklists.
  • Greater accountability: Advisers must not only adhere to regulations but also demonstrate that their practices are aligned with COFI’s overarching principles of fairness, transparency, and ethical conduct.
  • Consolidated regulation: COFI streamlines multiple pieces of legislation into a single market conduct framework, reducing regulatory fragmentation and creating a more cohesive system.

What’s staying the same?

While COFI introduces significant changes, your core responsibilities as a financial adviser remain intact. Here’s what won’t change:

  • The record of advice: Advisers will still need to document and justify their recommendations to clients from a suitability point of view.
  • Compliance frameworks: The fundamental structures of risk management, due diligence, and reporting obligations remain, albeit with stronger oversight.
  • Ethical standards: Honesty, integrity, fairness, needs-based suitability, client-first principles, and professional conduct continue to be at the heart of financial advice.

How to stay ahead

To ensure a seamless transition under COFI:

  • Stay informed: Keep up with regulatory updates and ensure you understand both new and existing obligations.
  • Strengthen compliance culture: Align your practice with COFI’s client-centric approach to be at the cutting edge of professional conduct.
  • Proactively engage with clients: Use COFI as an opportunity to rejuvenate your client engagement process and reinforce trust.

The bottom line

COFI represents an evolution, not a revolution. While new oversight mechanisms will shape the regulatory landscape, your core responsibilities as an adviser remain the same, which is to provide ethical, transparent, and client-first financial advice. Staying informed and proactive will ensure that you remain ahead of the curve.

Are you ready for COFI? Now’s the time to refine your approach and embrace the future of financial advice, alongside advice networks, such as Graviton, that support IFA structures.

 

 

 

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.