Empowering investor success through advice

Financial advisers are often misunderstood. To many, their role is reduced to picking funds or timing markets. But for Mark Sanderson, managing director of Morningstar in EMEA, the true essence of advice is far deeper.

“An adviser is often 90% psychologist and 10% planner,” he says. “It’s about helping people make better choices, set goals, stick to them, and not panic when markets get volatile. That fundamental role of support and coaching is the same everywhere – no matter the country.”

Morningstar, which spans investment management, platforms and advice software, has built its business around supporting advisers – from large banking groups to small independent practices. Sanderson is a firm believer in getting out of the boardroom and spending time with advisers in their own environments. “It’s easy to guess what advisers need. But you don’t have to guess because you sit with people, and they will tell you. Our job is to solve problems, not to create products in search of a problem.”

That focus on problem-solving has practical impact. He recalls speaking to a young adviser whose biggest challenge was not being able to put her children to bed at night. “That’s a time problem. If we can take away the inefficiencies in her day – all the swivel-chairing, the endless rekeying of data – we can give her that time back. And that’s just as much a part of our mission as building world-class models or platforms.”

How do you solve a problem like South Africa?

South Africa presents unique regulatory and economic challenges – from tax complexity to grey-listing concerns. However, Sanderson still feels there is reason for optimism here. “When you consider what this country has been through, you can’t ignore the progress. South Africans have a fundamental confidence in their country, in the community of people, to navigate and achieve difficult things. You only need to look at the Springboks to know that, right?”

He says that although sometimes it feels like one step back and two steps forward, as long as we’re moving in the right direction, that’s what matters. “Household wealth is higher than it’s ever been, and fewer people live in poverty than ever before – those are good stories we need to recognise.”

Sanderson notes that the similarities across markets are more striking than the differences. “Investors everywhere want the same things: to support their families and retire comfortably. Household wealth is higher than ever, demand for advice is rising, but supply isn’t keeping pace. Succession is a challenge globally; I would say one of the top two or three issues facing advisers in Australia, UK, US and South Africa. We need to make financial planning attractive to younger generations – to show them it can be a noble profession – values-driven as well as commercial.”

That values-driven focus is one reason Morningstar invests in financial literacy initiatives, piloting programmes in schools and communities. “Once you start teaching young people about money, you quickly realise teachers and parents also want to learn. The advice community can play a huge role here,” Sanderson says.

Why advice is important right now

In an era of geopolitical uncertainty and volatile markets, advisers play a critical role in keeping clients calm and invested. “While every generation thinks their situation is unique, uncertainty isn’t new,” Sanderson points out. “Wars, politics, volatility – they’ve always been with us. The only certainty is that uncertainty will persist. That’s exactly when advisers are most valuable: helping clients stay the course when panic could lead to crystallising losses. The pilot gets paid when there’s ice on the wings, not when it’s smooth flying.”

He praises the South African advisory community for remaining extremely strong, and being a beacon. “They are kind of like a lighthouse,” he says.

At the heart of Morningstar’s philosophy is independence. “We’re not here to push products. Our mission is simple: to empower investor success. That means being on the same side of the table as the adviser and their client, connecting the industry, and raising standards together. South Africa’s advice community is remarkably resilient and collaborative, and that gives me huge optimism for the future.”