The South African financial services sector is entering a period of significant change. On one side, major regulatory reforms are reshaping the rules of the industry. On the other, rapid advances in technology are changing how financial advice is delivered.
With the Conduct of Financial Institutions (COFI) Bill nearing full implementation this year, and the Financial Sector Conduct Authority (FSCA) prioritising artificial intelligence and technology on its 2026 monitoring radar, financial advisers are at a crossroads.
Discussing this crossroads on Momentum Connect, industry leaders Jeanette Marais (CEO, Momentum Group), Lelané Bezuidenhout, CFP® (CEO, FPI), and Ryk van Niekerk (Editor, Moneyweb), agreed that technology is a partner, not an adversary. The future of financial advice is not a choice between professionals and algorithms, but an evolution. True success will belong to those who can masterfully fuse human connection with digital hardware.
COFI: Shifting from a tick-box exercise to client outcomes
The impending full implementation of the COFI Bill represents the most significant legislative consolidation in the history of South African financial regulation. By merging multiple pieces of fragmented law into a single framework, COFI will touch every single financial adviser and how they run their practice, with no exceptions.
Crucially, COFI signals a structural move from a rigid, rules-based compliance environment to an outcomes-based model. A central component of this shift is the introduction of activity-based licensing, which streamlines rules consistently across the board.
“The most important part of the COFI Bill is that it focuses directly on outcomes for clients,” Marais pointed out. Rather than allowing compliance to be treated as a passive, administrative tick-box exercise, the framework demands that advisory firms actively prove they are delivering tangible and fair outcomes for clients.
Despite the mounting regulatory pressure, there is no need for financial advisers to panic, Marais said, as the bill is built on the existing foundational pillar of treating customers fairly (TCF). Proportionality is a critical feature of the framework, ensuring compliance requirements remain balanced and financially viable according to the specific size and nature of an advisory practice.
Play safely within the regulatory net
Crucially, advisers don’t have to wait for the final gazetting of COFI to align their practices, as key regulatory instruments are already active. The FSCA and the Prudential Authority have already implemented strict interim conduct standards that apply to all organisations, regardless of size.
Regarding Artificial Intelligence (AI), advisers must be cautious of the significant Protection of Personal Information Act (POPIA) and General Data Protection Regulation (GDPR) risks associated with plugging client information into open-source AI platforms. Practices must establish clear guardrails outlining which tools are permitted, ensuring that sensitive consumer data is never compromised or exposed to public databases.
The ‘Dr. Google effect’ hits financial planning
As regulatory parameters tighten, generative AI tools like ChatGPT, Gemini, and Copilot are simultaneously democratising access to financial data. This technological shift is giving rise to a phenomenon long experienced in the medical sector: clients arriving at consultations armed with self-generated medical diagnoses and demanding specific prescriptions. In the financial services industry, easy accessibility means clients will increasingly utilise these platforms to build baseline strategies before entering an adviser’s boardroom.
AI has a unique psychological advantage that human advisers often struggle to bypass: a total lack of judgment “Machines don’t have empathy, but they are highly informative and entirely uncritical. We have to realise the emotional attachment clients have, to feeling guilty or judged, and adjust to that reality,” said Marais.
Why adviser intelligence must precede AI
While an AI prompt can easily demonstrate a clean, structured financial plan, an inherent flaw remains: AI agents operate with zero emotion, no proportionality, and zero legal accountability in a trust-based industry. If a self-generated algorithm goes wrong, South Africa’s currently unsettled AI policy landscape leaves a very real liability gap.
This is where the human guardrail becomes indispensable. If you don’t know what you’re asking AI, it’s “garbage in and garbage out”, the panel agreed. A consumer can only assess a generated plan if they already possess an authentic baseline to compare it against.
It’s therefore imperative that professionals possess deep adviser intelligence before they can safely deploy artificial intelligence. Sound advice requires an understanding of human behaviour, personal money biases, and unique journeys, which are all elements a machine cannot feel.
To remain ahead of the AI curve, advisers need to view continuous professional development as a strategic tool rather than an administrative chore.
The adviser of 2035: Moving from planner to coach
Rather than acting as a threat, automation and large language models (LLMs) present an unprecedented efficiency multiplier for independent financial advisers (IFAs). By delegating the heavy lifting of report creation and drafting of Records of Advice (ROAs) to secure, ring-fenced algorithms, advisers can reclaim their most valuable asset: time.
“You don’t have to sit and spend days on your record of advice. AI can generate all of that for you,” says Marais. “Use those tools to save yourself time so that you have the freedom to be a true financial coach to your client.”
This structural shift will inevitably disrupt the sector’s core, changing the role of the adviser from a plan-writer into an execution-focused coach. This digital leverage means a single, tech-empowered advisor will be equipped to productively and deeply serve a significantly larger client base than was previously possible.
As the industry looks toward 2035, the winning formula will belong to those who cultivate two mandatory skills: adaptability and curiosity.
“Ultimately, AI cannot help a client realise their dreams, nor can it hold their hand through complex, highly emotional life transitions,” said Marais. “In an uncertain world filled with macroeconomic noise, clients don’t just want investment returns; they want reassurance, perspective, and a trusted human partner who can look them in the eye and say, ‘I’ve got you.’”
The panel agreed that AI will not replace financial advisers. But financial advisers who use AI will replace those who do not.
