Do you sometimes doubt if your financial adviser is right about everything? When the COFI Bill becomes law they will have to be.
South Africans who have little money often feel vulnerable to scams in which scammers clean out their bank accounts. But wake up and smell the COFI, an expert says, as more consumer protection is on the way in 2026.
The Conduct of Financial Institutions (COFI) Bill will redefine professionalism in South African financial advice and advisers who adapt early will lead the field, says Johan Minnie, CEO at Consult by Momentum.
“South Africa’s financial advice sector is entering a decisive new era. The COFI Bill will redefine what quality advice means and how it must be proven to be of good quality. Instead of showing that documents were completed correctly, advisers will have to demonstrate how clients were supported, what they understood and whether the guidance made a meaningful difference.”
Minnie says unlike the current rules and regulations approach that dominates the financial services industry, COFI, much like Treating Customers Fairly (TCF), is principles-based. It places a clear obligation on advisers to demonstrate, on principle, that they gave sound advice in the client’s best interests, charged fair compensation in line with the effort involved and disclosed what needs to be disclosed.
The burden of proof shifts to the adviser which is ultimately fairer to the client.
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COFI Bill: Regulatory burden or opportunity to earn trust
“Some advisers may view this as a regulatory burden. However, I urge you to rather see it as an opportunity to earn trust and modernise how you work. The current compliance culture still leans heavily on paperwork as the evidence that advice was appropriate and if you ticked all the boxes, you were covered.
“COFI asks something more purposeful and this is not a small adjustment – it changes how trust is earned and how the profession will be evaluated.”
Yes, change is always hard, he says. “We see this in our health: we all know we should walk 10 000 steps a day, avoid smoking and drink less but often we say, ‘tomorrow is another day’. Then one day a heart attack forces a lifestyle overhaul and change is thrust upon us.
“The point is simple: those who adopt better habits early avoid the shock later. Advisers who begin applying COFI principles consistently now, will avoid the pain of sudden change when the legislation comes into effect.”
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COFI Bill will require advisers to show value when tested
Minnie says the question is no longer whether advisers understand the rules, but whether they can show value when tested.
“This will be especially difficult where ongoing product fees have continued long after genuine engagement faded. COFI does not only address poor conduct but also highlights weak value propositions and outdated service models that once passed without challenge.”
He says advisers should use the months ahead as active preparation for this new world. “Those who begin now will be ready, with service models that can be explained and evidenced. COFI will favour advisers who already work with structure and consistent client contact, supporting those who communicate clearly, keep accurate records and treat advice as an ongoing professional relationship rather than a once-off interaction.”
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Advisers must also make sure client expectations are reasonable
Minnie points out that part of this involves managing expectations. “Advisers must ensure clients’ expectations are reasonable. For example, you cannot save R500 a month and expect to retire as the next Warren Buffett.
However, he says, it is equally important to understand what the client wants to achieve by asking the right questions, playing their goals back to them and building a plan tailored to their unique outcomes.
“This shift will also increase the importance of strong support systems. Advisers aligned with organised, well-resourced platforms will transition with less friction than those trying to redesign processes alone.”
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