COFI and the quiet reshaping of independent advice

Most clients will never read the Conduct of Financial Institutions (COFI) Bill.

But they will feel its effects.

Over the next few years, South African financial advice will quietly shift away from product distribution and toward something far more accountable: ongoing client stewardship.

That sounds technical. It is not.

It affects how advisors are paid, how recommendations are documented, how conflicts are managed, and ultimately whether clients receive advice that genuinely serves them over the long term.

For clients, the important question is simple: who is structurally built to act in your interest when markets are difficult, emotions are high, and incentives become conflicted?

COFI is increasingly forcing the industry to answer that question properly.

The old model is slowly breaking. For many years, parts of the industry operated around product placement. The system rewarded gathering assets, implementing products, generating transactions, and moving clients through distribution pipelines.

That does not automatically mean bad advice was given. Many advisors operated ethically within that system. But structurally, the incentives often mattered more than clients realised.

The problem is that clients usually only discover weaknesses in an advice model during stressful periods: market declines, retirement transitions, liquidity events, claims disputes, or major life changes. That is when trust architecture matters.

Advice is becoming more operational. The future advisor is not simply someone who 'picks investments'. Investment products are increasingly commoditised.

Real value now sits in behavioural coaching, governance, portfolio discipline, cash flow structuring, tax coordination, risk management, and operational consistency.

Clients do not need someone who predicts every market move. They need someone who can help them avoid destructive decisions during uncertain periods. That is a very different role.

Why clients should care: most long-term wealth destruction does not come from one bad fund. It comes from panic decisions, inconsistent planning, fragmented advice, excessive switching, hidden incentive structures, and emotionally reactive investing.

Good advice increasingly looks quieter than many people expect. Less prediction. More process. Less salesmanship. More stewardship.

The firms likely to survive the next decade are the ones building systems around client outcomes rather than product activity.

COFI is not a dramatic overnight event. It is a gradual structural reset.

Clients may not notice the legislation itself, but they will increasingly notice the difference between firms built around distribution, and firms built around long-term fiduciary responsibility. That distinction will matter more every year.