How to thrive in a COFI world

For many South African financial advisers, the Conduct of Financial Institutions (COFI) Bill has long hovered on the horizon – anticipated, debated, and at times even feared. Yet as the bill moves closer to implementation, a refreshing realisation is taking shape: for quality advisers already committed to professionalism and customer-centricity, COFI is not a threat. It is, in fact, an enormous opportunity.

Across the industry, a common sentiment has emerged: advisers are far more COFI-ready than they realise. After years of operating under FAIS, embedding the General Code of Conduct, and refining robust advice processes, most practices have already done 80–90% of the work that COFI will require. FAIS, as Keith Peter, Advice Manager for Old Mutual Personal Finance put it, was the ‘dress rehearsal’ – and advisers have already performed it successfully.

Why COFI rewards quality advisers

One of the most important perspectives to embrace is that COFI is not punitive legislation. It is not designed to catch out good advisers or impose unnecessary burdens. Instead, it aims to elevate the industry by rewarding those who consistently prioritise good, measurable client outcomes.

For years, high-quality advisers have found themselves competing against peers who cut corners, prioritised commission over client needs, or relied on sales-driven strategies instead of sound advice. These practices have eroded trust and contributed to industry-wide penalties that honest advisers have often felt unfairly implicated.

But COFI represents a new level of maturity in SA’s regulatory landscape. Penalties for non-compliance have already increased dramatically – by as much as 800% in the last year – reflecting a stronger stance against poor or unethical conduct. Rather than a negative, this signals progress: COFI will help weed out wayward conduct and support the creation of a genuinely professional industry where quality advice stands out clearly.

A shift from rules to outcomes

While FAIS has been largely rules-based in that it dictates what advisers must do and how they must do it, COFI takes a principles-based approach. It is less interested in prescribing the route and more concerned with ensuring clients arrive safely at their financial destination.

Under FAIS, the regulator told you which road to take, how many stops to make, and what time to arrive. Under COFI, you choose the route, the pace and the process; as long as the outcome is demonstrably in your client’s best interest.

This shift empowers advisers. It acknowledges professional judgement, encourages innovation, and embraces unique business models, without compromising on client protection.

Not one-size-fits-all

A major early concern was that every institution, from the largest insurer to the smallest independent FSP, would face identical regulatory demands. COFI explicitly rejects this notion. Instead, oversight will be proportionate, based on:

• Business size
• Complexity
• Nature of licensed activities
• Risk profile
• Quality and completeness of data submitted.

This is where COFI becomes particularly empowering. Smaller practices will not be overburdened simply because large institutions operate differently. The better your data, the clearer your risk profile and the lighter your regulatory load.

The new currency of quality data

Traditionally, advisers have demonstrated quality through qualifications, experience, and tenure. Going forward, COFI shifts the emphasis to measurable performance indicators including client retention rates; number and nature of complaints; client goal-achievement metrics; and satisfaction levels. Data becomes your new differentiator. It’s hard evidence that you provide outcomes in the best interests of your customers. 

Four steps to COFI-readiness

Although most practices are already a long way toward compliance, the remaining work requires intention and structure. A simple four-step action plan can help advisers prepare:

• Foundation: Conduct a COFI-readiness assessment. Map your business activities to COFI’s new licensing framework and identify strategic considerations, whether remaining independent, joining a network, merging or partnering with a platform.
• Implementation: Upgrade or refine your CRM systems, improve data collection processes and deploy any compliance infrastructure not already in place.
• Optimisation: Review your first year of COFI-aligned data. Identify gaps and embed enhancements and continuous improvements.
• Positioning: Market your quality by highlighting measurable outcomes such as customer retention, satisfaction, and goal achievement.

A future built on professionalism and partnership

In response to the complexity of the COFI framework, Old Mutual Independent Distribution has developed a practical, adviser-focused platform designed to simplify the journey to compliance. Recognising that the legislation spans hundreds of pages, the platform distils COFI into a user-friendly, actionable guide, enabling advisers to move from theory to implementation with confidence. It provides a comprehensive overview of the regulatory environment, including activity-based licensing, the broader Twin Peaks framework and real-time updates on COFI’s rollout, ensuring advisers remain informed and prepared at every stage.

More importantly, the platform moves beyond information into execution. It equips advisers with templates for  Omni Risk Return, readiness assessments, audit checklists, and business profiling capabilities, all of which are aligned to COFI requirements. By guiding users through structured data collection and flagging potential gaps, the platform enables practices to proactively manage compliance while strengthening operational efficiency. Built with integrated AI functionality, including a COFI assistant for real-time queries, the platform reflects a broader commitment by Old Mutual to partner with advisers, not only to meet regulatory demands, but to thrive within them.