How did you get into financial planning?
My first exposure to the industry was at 24 years of age while studying at Soweto College of Education. During this period, I stayed with my uncle who was an avid reader of the Sunday Times, in which the money section was of great interest to me. With a little research, I was able to purchase my first car three years after I started working, from the gains received in the subs-shares I had learnt about. Not many people, neither family nor colleagues, knew much about them.
Unfortunately, my experience with individuals in the financial planning industry was disappointing. I had some not-so-great “advice” such as a 24-year-long endowment that was to be used for my children’s university education.
It was incidents like this and the observation of my teaching colleagues’ mismanagement of their monies that further highlighted the need for adequate financial literacy within the communities that I was a part of. Unfortunately, the financial advisory industry was fraught with individuals who had their personal interests and not those of the clients at heart.
It was at age 30 when I decided that upon reaching my 40th birthday, I would have the freedom to choose between remaining in education or exploring other opportunities. With help from other financial advisors, I started an investment plan that was to help me achieve this.
During this period, a colleague introduced me to books such as The Millionaire Next Door; Rich Dad Poor Dad, and The Richest Man in Babylon, which further sparked my interest in personal finance. Upon reaching 40, I resigned as an educator, joined an NGO and a year later, in 2003, decided to work for Sanlam.
What is your philosophy and approach to financial planning?
My firm belief is that the progress, or lack thereof, of individuals in their financial affairs is largely based on their beliefs (both learnt and unconscious) so my approach is to empower individuals with information to make the best possible financial decisions.
…my approach is to empower individuals with information to make the best possible financial decisions.
What inspired you to start your own business?
With the introduction of RDR, being a tied agent meant that I could not service my clients as adequately as I would have liked. The need to service my clients as effectively as possible and my past experiences of running informal businesses ensued in the opening of my own business. Since opening the business, I have been able to onboard more partners, which has resulted in more options for my clients.
Another motivator was the opportunity to leave a legacy for my family and those who come behind me while actively combating the continuous unemployment challenge in South Africa.
Why would a client come to you for financial advice?
Clients come to us for unbiased financial planning that empowers them to make informed decisions. Our conversations are not product-based, and we limit the use of jargon so that decisions are made with the best possible knowledge.
We help the client to understand how various facets of financial planning fit together and we explain what the implications of change are in each area for the individual. We empower clients to make decisions that help them create options in life.
What are the challenges you have faced in your business?
Recruiting and retaining high-quality staff is one of the challenges faced in this industry. This requires one to shift focus from generating and delivering on sales to educating and mentoring staff, which seems to be a contradiction to how one is used to working.
Recruiting and retaining high-quality staff is one of the challenges faced in this industry.
Besides the challenge of attaining the adequate skills, remuneration structures have a large impact on business cash flow, especially if ex-salaried employees move to a production-based remuneration.
What challenges do you believe are unique to black-owned financial planning businesses?
Because the industry has historically not transformed, compared to our peers within the market, black-owned and managed FSPs must go through more hurdles to show credibility and gain trust with the market. At face value, our peers are perceived to be more experienced and qualified within the industry. Although the perception is evolving, the “older” clients still have this tinted view of the industry.
There is an expectation that a black financial planner should be employed by a prominent FSP and cannot be independent. The costs of being an independent FSP creates a barrier of entry into the industry.
Another unfortunate disadvantage is that black-owned financial service providers tend to work in silos and as such not much information is shared. Those who have been successful in the industry are hesitant to grow the pie in unison.
What do you believe are the advantages, if any, to be a black-owned financial planning business?
We can reach out in other languages rather than the conventionally used languages in the industry, thus breaking down some barriers in relationship building. This, in conjunction with sharing similar cultures, means we have additional lenses through which to better understand client decision-making. Examples of these include relating to the impact of urbanisation on family structures, etc.
We can reach out in other languages rather than the conventionally used languages in the industry, thus breaking down some barriers in relationship building.
What steps should the industry/regulator/FPI take to accelerate transformation in the financial planning profession?
The FPI could review membership fees. While it is important to maintain the professionalism of the institute and the need to have revenue to run the institution, a way should be devised to accommodate those who find it difficult to raise membership fees.
The institute may need to reach out to up-and-coming black independent advisors by meeting them halfway in terms of attending conferences. It would help to send the event proceedings to those that could not attend so that they have an idea of what is happening behind the high walls.
It would also help to work with previously black universities to introduce financial planning courses, as students could then consider financial planning as a career from the start rather than join mid-career through frustration.
The benefits of being an FPI member should be articulated more to all advisors and more roadshows that reach the outskirts where most black businesses are found, would help.