Stronger data, systems and processes will help MFP advisors move into the COFI framework with confidence while staying focused on their clients.
The proposed Conduct of Financial Institutions (COFI) framework is expected to bring significant change to South Africa’s financial services industry.
Financial institutions within its scope, from sole proprietors to large, diversified institutions, will need to meet its requirements. While these requirements are expected to be applied proportionately, businesses will still need to transition to the new licensing framework and adapt their systems and processes where necessary.
Although the final details are not yet settled, the scale of these changes means that financial institutions can already take practical steps to prepare. MFP is doing just that. It is monitoring developments and reviewing its business to understand where changes may be needed. Its current focus includes improving data quality, examining the end-to-end client journey and preparing the infrastructure supporting advisors operating under its licence.
Building a stronger data foundation
Good data will be central to meeting future reporting requirements. Financial institutions will need accurate, complete and accessible information to understand client experiences, identify conduct risks and show the outcomes their processes are producing.
MFP is reviewing the quality of its business data and conducting gap analyses to identify where improvements may be needed. This includes looking at how information is collected, stored and accessed across its advisor network.
MFP will also provide training to help advisors record client information, complaints and other relevant business information correctly and consistently. As the licensed financial service provider, MFP will be responsible for reporting to regulators on the activities conducted by advisors under its licence. Accurate records will give MFP the reliable data it needs to meet these reporting requirements while helping advisors understand what must be captured and why it matters.
Looking beyond compliance checklists
Under COFI, the focus is expected to extend beyond whether a policy exists or a process was followed. Financial institutions will also need to understand how their processes work in practice and what clients experience as a result.
MFP is already moving in this direction. It is looking across the client journey, including advice, ongoing servicing, reviews, claims and complaints, and using its data to identify trends and understand their underlying causes.
For example, MFP recently identified a trend in its complaints data and investigated what was driving it. Management considered the findings and used them to inform advisor training on good practice when handling complaints.
This shows the value of looking beyond the statistics and using data to improve client outcomes, internal processes and the guidance advisors receive.
Preparing systems and processes for the future
Technology and operational infrastructure have always been central to MFP. With advisors operating across the country, MFP’s customer relationship management (CRM) system is the backbone of the business.
MFP is now considering how this system may need to evolve under COFI. This includes looking at how information is captured, accessed, reviewed and reported, as well as how processes can be applied consistently. Where changes are needed, they can be built into MFP’s central systems, with practical guidance and training to help advisors apply them in their day-to-day work.
Turning regulatory change into practical guidance
As part of the Masthead Group, MFP is working closely with the Compliance Team at Masthead (Pty) Ltd to review its business and understand how COFI could affect it. This includes considering how its current activities may align with the proposed licensing framework and where its systems, governance, oversight or reporting structures may need to change.
By doing this work now, MFP is preparing for a smoother relicensing process and the broader changes COFI may bring. Because its advisors operate under its licence, MFP will manage the relicensing process at business level rather than it falling on each advisor in the business.
As the necessary changes are identified, MFP’s relationship consultants will guide their advisor panels through updated processes. Whether these changes relate to relicensing, reporting, record-keeping or other aspects of how the business operates, the consultants can explain what they mean for advisors and provide one-on-one assistance where required.
Preparing now for what comes next
MFP is not waiting for every detail to be finalised before it starts preparing for COFI. By improving its data, reviewing the client journey and assessing its systems, processes and future licensing needs now, it is laying the groundwork for the changes ahead.
This groundwork will help MFP advisors move into the new framework with confidence and continue doing what they do best: meeting with clients, providing advice and building strong, lasting relationships.